Tesco: The New Whitbread?

Whitbread PLC (according to Wikipedia),

                                            

is a multinational hotel, coffee shop and restaurant company....Its largest division Premier Inn, is the largest hotel brand in the UK with around 650 hotels and over 50,000 rooms. Its Costa Coffee chain has around 1,600 stores across 25 countries and is the world's second-largest international coffee shop chain.  Its other brands include the restaurant chains Beefeater Grill, Brewers Fayre, Table Table and Taybarns."

It wasn't always so.

From 1742, when Samuel Whitbread formed a partnership with Godfrey and Thomas Shewell and acquired two small breweries in London, until the 2002 sale of The Laurel Pub Company, Whitbread was in the beer business. 

Indeed, at its height, between 1961 and 1971, Whitbread's output increased from 2.1 to 7.4 million hectolitres and became Britain's third-largest brewer by output.

But the beer industry consolidated and globalised. Being big in one market was not sustainable. Facing the rise of InBev (now ABInBev), Diageo and SABMiller. Whitbread sank their last pint and moved on, leveraging their leisure experiences more profitably.

And Tesco?

Dominic Walsh in The Times today (March 26th) notes that Tesco have taken a minority stake in a New York Deli Diner concept restaurant Fred's Food Construction with the first outlet debuting from Monday in Tesco's main Osterley store. And Tesco are building up a portfolio of neat eateries: Giraffe, Decks, Harris + Hoole and Euphorium Bakery: Fred's is just another name on a developing roster.

Intended as incremental devices to pull traffic in to their retail stores; they may be a much bigger indicator of Tesco's long-term future. Whitbread beware: Fred's might be small beer today but not even Amazon have figured a way to let you eat out on-line.

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