Tesco Plc, the U.K.’s biggest grocer, agreed to buy the Giraffe restaurant group today for 48.6 million pounds ($72.7 million) in a bid to expand the services offered to customers.
Tesco will gain 48 restaurants, it said, including franchises in airports. The acquisition will help Tesco create “compelling retail destinations where customers can meet, eat and drink, as well as shop.” The first Giraffe to open next to a Tesco store will be near London, it said.
Giraffe’s founders, Russel and Juliette Joffe, will continue to work for the chain. Risk Capital Partners Ltd. and 3i Group Plc have sold a combined stake and are no longer involved in the business. 3i said it invested 10 million pounds in the business in 2006 and that today’s sale earned it a multiple of 1.6 times its investment.
“We invest in businesses that add value for our customers online or offline,” Kevin Grace, Tesco’s group commercial director, said on the company’s website. “Giraffe is hugely popular with a wide range of ages and particularly families –- we think our customers will love it.” Giraffe sells “fresh, seasonal” food including a “range of global dishes,” Tesco said.
Tesco has been fighting back for share against upscale chains including Waitrose and discounters Aldi and Lidl, pledging to invest 1 billion pounds to add staff, refresh its products and brighten stores. Kantar Worldpanel data released in January showed that the retailer matched market growth for the first time in 18 months. Tesco’s market share declined in February.
Tesco’s shares fell as much as 0.8 percent and traded down 0.6 percent, or 2.45 pence, at 378 pence at 10:52 a.m. in London. The Telegraph newspaper had reported the Giraffe acquisition before the market opened this morning.