Shopping trolleys are seen at a Tesco Express in southwest London September 22, 2014.
Shopping trolleys are seen at a Tesco Express in southwest London September 22, 2014. Reuters/Luke MacGregor

Britain’s supermarket giant Tesco has sold off a dozen sites that it no longer wants to develop. The transaction was worth £250 million (AU$531.6 million). The sites, located in various parts of London -- the South East and Bath -- will now be used for the housing sector, where 10,000 new homes will be built.

The land sites were purchased by Meyer Bergman, a property investment firm. Markus Meijer, chief executive of the property firm said the investment would give new impetus to the abandoned Tesco projects.

The retailer has dropped nearly 50 projects and many of those sites are now derelict. The plot sale is part of the supermarket's revival strategy, the BBC reported.

Expansion on hold

Alan Stewart, Tesco’s chief financial officer, told BBC Radio that Tesco would not develop new stores on the mothballed sites.

“We don't have the resource to put into these developments,” he said.

The development sites sold by Tesco include:

  • Fulham High Street
  • Highams Park
  • Hounslow
  • Lewisham
  • New Barnet
  • St Albans
  • Tolworth
  • Hillingdon
  • Woolwich
  • Epsom
  • Kensington

Tesco had announced in January 2015 that it will shelve plans to open 49 large supermarkets and close 43 unprofitable stores. The suspended expansion is part of chief executive Dave Lewis's strategy to revive the company into its past glory, which had taken a beating after consecutive losses and an accounting scandal in 2014.

Tesco’s decision to scrap its new stores has drawn criticism. Pat McFadden, Labour MP of Wolverhampton South East, said the local community in his area had been let down.

Clive Black, head of research at Shore Capital, noted that Tesco is trying to make the existing sites better, saying the retailer was selling the sites where it once wanted to open stores, because it wanted to reduce its burden of debt, expenses on rents and pension responsibilities.

“The journey has started, but there's a long road ahead before we can say Tesco is in calmer waters and sailing into much brighter times,” Black said.

Besides the lucrative sites sold in the south-east of England, Tesco owns more sites across the north of England but has not set a timeline for selling those sites, signalling that they will remain locked and unused.

Customer satisfaction

Meanwhile, Tesco has unveiled its hotly anticipated TV campaign, reports Marketing Magazine. The TV ad promotes the retailer's new Brand Guarantee scheme and features a family dynamic with three characters playing a mum, dad and 20-year-old son. They are being played by Ruth Jones, Ben Miller and new actor Will Close.

The supermarket has also increased manpower in its stores to add more checkout counters in a bid to cut waiting time for customers, reports Campaign Live.

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