Tesco sells Euphorium Bakery a year after taking full ownership

The grocer has struck a deal to offload Euphorium’s four high-street stores and its Islington factory to casual dining operator Soho Coffee, which will continue to operate the stores under the Euphorium brand.

Samworth Brothers, a long-term supplier partner of Tesco, has acquired Euphorium’s Weybridge factory.

Terms of the deal have not been disclosed.

Tesco takes back in-store bakeries

Following the deal, Tesco will take back ownership of the 57 in-store bakery concessions and smaller sites inside its Express stores, which were previously run by Euphorium.

All staff will be transferred back to the supermarket giant, but it is understood that “a small number” of managerial roles have been put at risk.

Tesco is set to launch a consultation in the coming days, but it is thought the grocer will seek to re-deploy staff into other areas of the business, rather than make redundancies.

The move, which was officially anounced to staff this morning, comes as Tesco pilots a new bakery format in some of its stores, including at its Extra store in Millbrook, Southampton.

A Tesco spokesman said: “We know how important a great bakery offer is to our customers, and this agreement will mean we can continue to serve shoppers with great quality Tesco bakery products.”

Focus on core business

Britain’s biggest retailer is focusing on its core supermarket operations as chief executive Dave Lewis continues his bid to turn the business around.

Tesco has sold off two of its biggest overseas businesses, Homeplus in Korea and Kipa in Turkey since Lewis took the helm almost two years ago.

It has also disposed of Dobbies Garden Centres, restaurant chain Giraffe and the Harris + Hoole coffee shop chain, while it also shuttered its NutriCentre health and wellbeing business as it increases its focus on rejuvenating the fortunes within the fiercely contested grocery market.

Tesco and its big four rivals Sainsbury’s, Asda and Morrisons have come under fire from discount duo Aldi and Lidl, who have wooed shoppers with rock-bottom prices and forced the established grocers to rethink their strategies.

Euphorium Bakery was founded in 1999 by Danny Bear in Islington, London. The grocer took a stake in the business back in 2012, before taking full ownership of the chain in April 2015.