Comment: Tesco shoppers are likely to choose Giraffe over horse

Tesco’s decision to buy child-friendly restaurant chain Giraffe for £50 million last month clearly underlines its determination to make big supermarkets more attractive retail destinations for consumers and we can probably expect new on-site mini-Giraffes in the near future.

There are obvious strategic benefits to this kind of deal, as Tesco is clearly hoping that the addition of family-oriented dining will make out-of-town shopping less of a chore. Just look at Tesco’s other recent additions: along with its acquisition of Giraffe, Tesco has also opened a number of Harris + Hoole coffee shops and Euphorium bakeries within some of its stores.

From an operations perspective, Tesco will also be able to bring vast economies of scale to the Giraffe business, in everyday items ranging from produce to light bulbs. Luke Johnson, the ex-chairman of Giraffe and the man who helped to expand PizzaExpress into a national chain, has already predicted that Tesco could build Giraffe into a 200-strong chain in just five years.

The growth of Tesco’s business in Asia has already done well out of this strategy; the company’s two biggest international businesses are in South Korea and Thailand, where Tesco hypermarkets are often situated within shopping centres. The success of this model means that we’re likely to see a lot more of these transactions, with larger conglomerates acting as aggregators, using their size and vast buying power to pave the way for greater diversity in their business models.

In Tesco’s case, not only could this approach turn Giraffe into a household name across Britain very quickly but, with the might of Tesco behind it, there may be some other interesting opportunities as well. For example, what about a new range of Giraffe ready meals?

The PizzaExpress connection crops up here again, as PizzaExpress is already a well-known brand in supermarkets, selling more than 31 million pizzas, fresh pasta and the leading light salad dressing. Earlier this year, the company expanded its supermarket range further with the launch of two new ‘skinny pizzas’. 

So could Giraffe ready meals be far behind? Giraffe already benefits from a strong affinity with young children, so the opportunity for parents to make a guilt-free purchase of a ready meal that features the Giraffe logo - and which purports to be healthy / organic / insert your favourite marketing buzzword here - could be a very successful side-line business indeed. 

Even though Tesco has been the butt of many jokes in recent weeks, the company could be on to a real winner with Giraffe. With the horsemeat scandal already fading from memory, Tesco now has a golden opportunity to focus on a different animal altogether.

• Dan Coen, director, Zolfo Cooper