Tesco premium plan hits supermarket shares

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Shares in supermarkets have fallen sharply after Tesco said it was considering plans for a new chain of high-end convenience stores.

The proposal for a chain based on its Tesco Finest food range comes nine months after the supermarket giant opened discount retailer Jack’s.

Although Tesco has set no date for its latest venture, upmarket rivals Marks & Spencer and Ocado saw their shares fall 3.5% and 4% respectively.

Tesco’s own share price was volatile.

It made gains at the start of the day, then went into reverse, but was up 0.25% by mid-afternoon.

Sainsbury’s shares were down 0.8%, while Morrisons’ were up 0.7%.

The market reaction came after Tesco chief executive Dave Lewis unveiled the Finest stores plan to an audience of analysts and investors on Tuesday.

Speaking to reporters on Wednesday, Mr Lewis said: “Tesco Finest as a brand is one of the largest food brands in the country. We have a very high percentage of more upmarket customers.

“The opportunity to curate that range and bring new things in a more convenient outlet is something that we have tested, is something we’re interested in.”

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