The new Holland & Barrett concessions will operate as independent retailers within Tesco’s stores, and will be staffed by fully-trained Holland & Barrett employees. The first 120m2 concession opened this week in a Tesco Extra store in Dudley, with the remaining five – reportedly in Cambridge, Coventry, Gatwick, Newcastle and Watford – to follow by the end of August.
Wide product range
Trial stores will carry around 3,000 Holland & Barrett product lines, including its tea bar and pick-and-mix offerings. A Tesco spokesman said the retailer had not put a time limit on the pilot programme, and would see how customers responded to it.
“We’re always looking at new ways our stores can best serve the needs of our customers, so we’re excited to be embarking on this partnership with such a recognised and trusted brand as Holland & Barrett. The new concessions will provide an exciting new offer for our customers that will complement our Tesco stores,” said Matt Davies, CEO of Tesco UK and Ireland.
Tesco’s move follows the closure of its NutriCentre business in April, after NutriCentre’s losses rose to €10m in 2015, almost four times as much as the year before. Tesco acquired a 50% stake in the nutritional supplements vendor in 2001, and operated 12 stand-alone NutriCentre stores and 11 concessions in its supermarkets at the time it shuttered the business.
The retailer’s spokesman noted the collaboration with NBTY-owned Holland & Barrett was a partnership, rather than an in-house operation with the challenges that come with it. Retail analysts have suggested a partnership such as this will allow Tesco to avoid the risks and expenses it faced with NutriCentre, and fits the pattern of its collaboration with Arcadia.
‘A more compelling offer’
“Tesco has been looking at how to reconfigure some of its larger store space for a while now and clearly feels that Holland & Barrett is a well trusted and authoritative brand with a more compelling offer. The NutriCentre business had been loss-making for a while so it clearly made better commercial sense to link up with a stronger partner and leading player within the sector,” said Neil Mason, head of European retail at Mintel.
“Holland & Barrett has been performing well in recent years and has continued to innovate in particular with its new More Format which includes support services as well as new health food and drink on the go concepts with its VBites Café and the Zenerjii Juice Bar,” he added.
Holland & Barrett CEO Peter Aldis said: “This pilot is a fantastic opportunity to demonstrate the value of a partnership between two trusted and complementary brands in retail and we are excited to be exploring with Tesco how their customers respond to this innovative in-store concept.”