Shock closure will ripple beyond the checkouts
Tesco has confirmed its Kirkcaldy supermarket will close within weeks with the loss of up to 189 jobs.
As customers waited outside shuttered doors on Hunter Street yesterday (Wednesday) morning, devastated staff were told by bosses the store would shut for good on April 4.
The closure is part of a major review of Tesco’s operations across the UK, but will be a hammer blow to the town centre - it’s the single biggest retail closure to hit Kirkcaldy in many years.
The site has been a supermarket for over 40 years, operating under the old name of William Low before Tesco took over.
The future of the Post Office in the Postings, which is operated by Tesco, has also been thrown into doubt.
It was closed on Wednesday as staff took in the news, and re-opened today (Thursday).
Dave Lewis, chief executive, said: “Earlier this month I announced that our performance as a business has fallen significantly short of where we would want it to be and that to protect the future of the business in the UK we would close 43 unprofitable stores.
It is with great sadness that I have to tell you that our Kirkcaldy Superstore is one of the 43 we plan to close.
“The decision to close the store has been exceptionally difficult to take.
“I recognise it will affect many hard working colleagues, our customers and the local community.
“Our priority is to explain what this announcement means for our colleagues and wherever possible, offer them alternative roles with Tesco.
“I would like to thank all our customers who have shopped in our store.”
A spokesman also confirmed Tesco had informed Royal Mail of its decision yesterday (Wednesday) and would be “discussing the way forward with them over the coming weeks.”
The Press understands Tesco’s lease at The Postings was due to expire late this year and, although nervous about the store’s long-term prospects, some staff believed their jobs would be secure until then.
Move likely to impact on Fife Council
The move is likely to impact on Fife Council, which draws in almost £240,000 a year from the car park above Tesco’s - the most lucrative parking site in Kirkcaldy - and is about to spend £95,000 on improving the Postings steps at Bell Inn Wynd.
David Ross, leader of the Council said he had spoken to Tesco’s corporate affairs manager and would be meeting in the next few days.
“I want an explanation for their decision to pull out of what must be one of their busiest stores in Fife,” he said.
“I am keen to explore any opportunity for keeping the Kirkcaldy store open, but failing that we will be seeking assurances about the future for the staff and what can be done through redeployment or other ways of minimising the impact on them.
“I am also arranging an urgent meeting with Threadneedle, the owners of the Postings, to assess the impact of the Tesco decision and to discuss how we can work together to ensure a positive future for this key part of Kirkcaldy town centre.
“The future of the Post Office currently located in the Tesco store is another issue we will be seeking assurances on.”
However, reacting to the news, MSP David Torrance expressed doubts about the shopping precinct’s future, describing Tesco’s decision as a “massive blow” for the local economy and other businesses on the High Street.
“It’s also bad news for The Postings to lose its anchor store and you wonder how long it will be able to last,” he commented.
“This is going to have a huge impact on the lives of the employees who are going to lose their jobs, this is just bad news for everyone.
“I will be asking the Scottish Government to step in. I will be speaking to John Swinney and ask that we to bring in re-employment specialists to work with the Tesco employees and to give them the help and support that they need.”
Claire Baker MSP also described the announcement as “a devastating blow to [Tesco’s] workforce and Kirkcaldy town centre.”
“The store has been a valuable employer to the town throughout the years but it is now vital that everything is done to ensure that job losses are kept to a minimum and all help is given to the almost 200 strong workforce,” she said.
“There are also questions about the future of the Post Office in the heart of Kirkcaldy, what will now become of its future with Tesco closing?”
“I will be raising the issue in Parliament with the Scottish Government.”
Cull of ‘unprofitable’ stores
Despite Tesco’s statement earlier this month to close 43 stores across the country, yesterday’s final announcement still came as a shock and a number of staff, too upset to work, took up an offer to go home for the day.
The Press understands that, during yesterday’s meeting management blamed prohibitively high rent (£750,000 a year) on its decision to close the Kirkcaldy store and also its rates, which are reportedly in the region of £700,000 per annum.
Tesco, however, would only confirm publicly it had “reviewed the store extremely carefully but unfortunately could not see a route to profitability”.
Earlier this month the beleaguered supermarket warned it would close 43 unprofitable stores across the UK.
The firm also shelved plans to open a further 49 new “very large” stores and confirmed two of its businesses - Tesco Broadband and entertainment service Blinkbox movies - would be sold to TalkTalk.
Additionally, Tesco announced it would close its staff pension scheme, make cuts of £250m, and reduce overheads by 30 per cent. The major shake-up comes after two years of trouble which saw Tesco suffer falling sales and profit warnings.
Last year, the company was embroiled in an accounting scandal, which resulted in the departure of some senior executives.
Pauline Foulkes from Usdaw (Union of Shop, Distributive and Allied Workers) said staff had worked hard to make the shop viable during a difficult time for the company.
“We will now enter into full and meaningful consultation meetings on this proposal, where we will look closely at the company’s business case for the closures,” she vowed.
“Our priority is to maximise employment within Tesco, seek redeployment opportunities for members, where possible, and to keep job losses to a minimum.
“We will support, advise and represent our members throughout this difficult period of uncertainty.”
Cllr Neil Crooks, chairman of Kirkcaldy area committee, said: “We are all terribly saddened by the news that Tesco have announced the closure of The Postings store.
“We will obviously now be working with our community and business partners to see what help we can offer to the area. We will also continue to support the hard work which Kirkcaldy’s Ambitions and the Bid Group put in to rejuvenating the town centre.”