Tesco has bought family-friendly restaurant chain Giraffe for £48.6 million as part of its ongoing efforts to improve the profitability of the supermarket group.
Philip Clarke, chief executive of Tesco, pledged a £1 billion turnaround project to reinvigorate the supermarket giant, which has already seen supermarkets being modernised, new staff being taken on and a 49% investment stake in coffe chain Harris + Hoole, which will see a number of coffee shops open in adjoining premises to Tesco outlets over the coming months.
The deal will see Russel and Juliett Joffe, the original founders, being retained by Tesco, along with the rest of the management team. The first Giraffe restaurant to open next to a Tesco store will be near London.
Kevin Grace, group commercial director at Tesco, said in a statement on Wednesday: "We invest in businesses that add value for our customers online or offline; as we've done with Harris + Hoole, Euphorium, blinkbox, and now Giraffe.
"We have the opportunity to develop some of the space in our larger stores to create retail destinations that offer customers even more choice. Giraffe is hugely popular with a wide range of ages and particularly families – we think our customers will love it."
Joffe added that the move would allow Giraffe to be introduced to a wider audience, presenting good opportunities for growth.
"It will be very much business as usual at Giraffe," he added.
The first Giraffe opened in Hampstead, North London in 1998 and the group now consists of 48 sites nationwide, including franchised sites at Heathrow and other UK airports as well as one in Dubai.
Tesco will own 100% of the business, as the deal also sees venture capitalists Risk Capital Partners and private equity house 3i selling their combined stake.
Separately, Tesco was forced to withdraw its 'Simply Roast' frozen meatloaf on Tuesday night after tests revealed it contained between 2% and 5% horse meat.