Tesco buys Giraffe restaurants

Supermarket group Tesco has bought the restaurant chain Giraffe for £48.6m.

The move will see the supermarket open Giraffe branches near to Tesco stores as it seeks to create “retail destinations” for customers.

Tesco will hope that the acquisition will help revitalise its UK business.

Over the past year, the group has been revamping its UK stores. In January, it reported its strongest growth in UK Christmas sales for three years, but said there was “a lot more to do”.

Tesco pointed to Giraffe’s popularity with a wide range of ages, particularly families, as part of its appeal.

“We think our customers will love it,” said group commercial director Kevin Grace.

The supermarket recently bought a 49% stake in Harris and Hoole coffee shops, a move which drew criticism from some shoppers who felt they had been duped into believing it was an independent business. It has also invested in the Euphorium Bakery chain.

Analysts also suggested that the move could help Tesco solve a crucial problem: what to do with the retail space that was once devoted to things like CDs and movies.

Tesco can “implant Giraffe restaurants into its larger stores where it has an excess of retail space,” said UBS food retail ana- lyst Mike Tattersall.

Analyst Matt Piner: “This deal will get people to stay longer and spend more in Tesco”

Giraffe founders Russel and Juliette Joffe and Andrew Jacobs will remain in place on the management team, with Russel Joffe continuing as managing director.

“This move will allow us to introduce Giraffe to a wider audience, presents great opportunities for growth and for the team to be involved in an exciting stage in our brand’s development,” said Mr Joffe.

Private equity firms 3i and Risk Capital Partners have sold their stakes in the business. The Giraffe story • Founded by husband and wife team Russel and Juliette Joffe, and Andrew Jacobs

• First restaurant opened in Hampstead, north London in 1998

• Russel Joffe liked the fact that the giraffe has the biggest heart of any land mammal

• Has a family-friendly reputation

• Serves food “to the sounds of world music”

• Now has 47 sites in the UK, including franchised sites at Heathrow, Gatwick and Manchester airports, as well as one in Dubai