Tesco tests cashless store; to bake fewer products in-store

Tesco, Britain’s biggest supermarket chain, opened its first high street cashless store on Tuesday, marking a shift among shoppers to electronic payments from coins and notes.

In a separate announcement, the retailer said it will restructure the bakery operations of its larger stores, with fewer products to be baked in-store.

At the Tesco Express store on High Holborn in central London, shoppers can pay at self-service tills using a range of electronic payment methods, including debit cards, credit cards and Apple Pay on their phones. They cannot use cash.

It is Tesco’s first mainstream store to go cashless after it opened one at its Welwyn Garden City headquarters campus in 2018. That store is mainly used by Tesco staff although the general public can also use it.

The Welwyn store is also trialing a checkout-free method of payment, allowing customers to scan products on mobile devices to deduct payment directly before they walk out of the store. That option is not available at High Holborn branch.

A Tesco spokesman said the High Holborn store would help customers pay more quickly. “We are looking forward to hearing customer feedback,” he said.

The 101-year old Tesco, which trades from 3,787 stores in Britain and Ireland, chose the High Holborn store for the trial because it serves a high concentration of office workers. It said it wanted feedback before considering rolling out the idea elsewhere.

Tesco has previously said some of its convenience stores in Britain were already only receiving 20 percent of payments by cash, making a cashless roll-out likely in future.

Tesco’s main UK rival Sainsbury’s trailed a till-free grocery store in April, with shoppers using its SmartShop Scan, Pay & Go app. The shop still had a helpdesk for customers who wished to pay with cash or cards.

Bakery shake-up

Tesco said it is making changes to its bakery offering because of a big shift in consumer tastes, with shoppers buying fewer traditional loaves and more wraps, bagels and flatbreads.

From May, 217 stores will continue to offer baking from scratch, 201 stores will see some products part-baked and 58 stores will have all products delivered pre-prepared and only finished in store.

The move will put 1,816 workers at risk of redundancy.

“Due to some stores doing less scratch baking, as well as the simplified routines these changes will bring, we will unfortunately need fewer colleagues to work in these areas,” it said.

Tesco also plans to increase its alternatives to traditional loaves and grow its regional bakery ranges in partnership with small local suppliers.

All of Britain’s big supermarket groups are chasing efficiency and cost savings to better compete with German-owned discounters Aldi and Lidl, which are winning market share by opening lots of new stores.

Tesco cut 4,500 jobs last summer, while No. 2 Sainsbury’s cut hundreds of management roles last month.

Also last month No. 4 Morrisons said it planned to cut 3,000 management jobs.

Separately on Tuesday, Tesco said it had completed its exit from China with the £275 million sale of its joint venture stake to state-run partner China Resources Holdings (CRH).