Statement on Tesco proposed Kirkby store

Published on: Friday, 16-January-2015

On Thursday 8 January, Tesco announced that it would be radically transforming its business model due to its disappointing business performance. As part of that announcement, the company took the decision not to proceed with 49 planned new developments across the UK and to close 43 existing stores nationwide.

Having made that national announcement, Tesco then contacted the Council to advise that “with a heavy heart” the proposed new store in Kirkby town centre is one of those schemes which will not be going ahead.

Tesco also confirmed that it would complete the ongoing work to regenerate the existing Kirkby town centre and has pledged to be as helpful as possible to the Council in working up an alternative plan so that the local community will still benefit from an improved retail offer in Kirkby.

You can read the letter from Tesco’s Chief Executive here.

What does this mean for the overall regeneration of Kirkby town centre?

Tesco will complete its ongoing work to transform the public spaces in the existing town centre.

Tesco will also finish the current work to clear the site of the empty houses on Cherryfield Drive so that the site will be available for future development.

The proposed retail development represented only one element of the overall regeneration programme and many aspects have already been delivered or are currently under construction.

Knowsley Council will now focus on finding another private sector partner to step in and complete the retail aspect of the programme.

Does this mean there will be no new retail development in Kirkby town centre?

Knowsley Council remains absolutely committed to the regeneration of Kirkby town centre and that includes a much-needed retail development.

We are already making contact with other major retailers and developers to explore all options available to deliver the retail and leisure offer that Kirkby needs.  Tesco has agreed that the company will also do everything possible to help in this regard.

If Tesco couldn’t build a new store in Kirkby, why would any other retailer?

Tesco’s decision not to build a new store in Kirkby is based on a decision to reduce the size of the business and cut costs nationally, rather than any issues at a local level.

Tesco’s financial performance is a nationwide issue, not specific to any one development.  This is clearly shown by the fact that it has announced that a total of 49 planned developments across the UK will now not be going ahead, while 43 existing stores are being closed down.

For example, and to show that Tesco’s announcement was not caused by anything to do with Kirkby, you can see the effect which Tesco’s announcement has had in another area of the country here.

The financial problems Tesco faces are specific to Tesco.  Other retailers do not face the same difficulties, so they will not have the same barriers to developing in Kirkby.

The scheme is still viable and there is still a clear and compelling business case for delivering a brand new retail development in Kirkby town centre.  We will explore every option to make that happen.

Was Tesco the right partner for this scheme?  Shouldn’t Knowsley Council have foreseen this problem?

There was absolutely no way anybody, including industry experts, could have predicted the financial situation Tesco currently finds itself in.
Tesco is the UK’s largest retailer and one of the country’s most successful companies.  It was precisely the profile of company Knowsley Council wanted to work alongside to deliver our positive ambitions for Kirkby.

Some time ago, Knowsley Council did initially approach a number of other major retailers to gauge interest in delivering a retail development in Kirkby town centre.  Those retailers were either not able to deliver the scheme or chose not to.  It is simply not true to suggest that Knowsley Council could have had its pick of retailers to come to Kirkby at that time or at any time since.

Knowsley Council only received the news that the Kirkby store was not going ahead on Thursday 8 January.

Up until then, we were continuing to work closely with Tesco on all aspects of the overall regeneration programme and we had no reason to believe at any stage that any part of the scheme was in any doubt.

As recently as October 2014, Tesco carried out a review of its current schemes and considered Kirkby to be a viable development.
Tesco then continued to hold meetings with the Council and other third parties throughout November and December with a view to bringing forward its detailed plans for the new store and the retail units.

Tesco has contractors on site in Kirkby right now, carrying out work to improve the public realm and demolish the housing.

In summary, Tesco is still investing significant sums of money in Kirkby.  There was therefore no reason or evidence to believe that this would stop until the announcement on 8 January.

Will Tesco’s decision affect any other future investment in Kirkby?

There are already a number of other key developments in the pipeline for Kirkby.

Those developments follow the significant investment already made in Kirkby by Knowsley Council and its partners.

In recent years, a total of £26m has been invested in the town centre to deliver the Kirkby Centre, new Kirkby Market, brand new St Chad’s Health Centre, public realm improvements and new St Kevin’s Drive housing development.

In addition, the wider Kirkby area has benefited from investment of almost £96m, which has provided new schools, leisure facilities, retail academy, green space improvements and initiatives around energy saving , sustainable transport and housing developments.

Why are the empty houses on Cherryfield Drive still being demolished if Tesco is not going to build on the site?

Tesco had commenced work on the demolition of these empty properties several weeks before they made their announcement.  As explained above, the Council is still proceeding with the regeneration of the town centre area, so the work will be completed later in January 2015 because the site on Cherryfield Drive is still required for future development.

These properties are not – and never have been – owned by the Council.  We have been advised by the contractor that the “soft strip” of the interiors of the houses has almost been completed so that the demolition will take place shortly.

The utilities have been disconnected from the properties for several weeks now and we understand that the houses are now in an extremely poor condition, and are simply not in a state to be brought back into use anyway.

The Council has a number of new housing developments in the pipeline.  Together with the proactive work the Council is carrying out to restore empty properties in the borough, there is no urgent need to bring these particular properties back into Kirkby’s housing stock.

Could Knowsley Council have done more to avoid Tesco’s decision?

No.  The Council has done everything possible to support Tesco to deliver its new retail store and wider regeneration of Kirkby town centre.
Tesco’s decision is completely beyond Knowsley Council’s control and reflects the national financial problems the retailer faces.

Indeed, in his letter, the Chief Executive of Tesco praised the Council’s support, patience and collaborative approach to its work in Kirkby.
Tesco has also commented that “Kirkby still holds substantial potential for regeneration.”

The Council is now actively pursuing all options available to deliver the retail development as part of the wider regeneration programme.

Again, you can view the official letter from Tesco informing the Council of its decision here.

Knowsley Council will continue to keep residents informed of progress via the Council’s website, Knowsley News magazine, Facebook and Twitter.