Recently filed accounts show that pre-tax losses at Harris & Hoole ballooned to £25.6m in the year ending 23 February 2014, more than double the value in the previous year.
The coffee chain, part-owned by Tesco, has been driving expansion, having opened 22 new shops. It will now need an additional £6m of funding from Tesco up to the end of 2017 in order to meet its financial obligations.
Tesco has so far committed to continue providing financial support for at least another 12 months and has said it intends to support up to £7.5m of funding. The supermarket chain isn‘t currently asking for repayment of its £48m loan to Harris & Hoole either, with interest owned by the business for the next 12 months.
Former Tesco boss”¯Philip Clarke merged the retail offering with food & beverage so as to boost footfall in Extra stores. Along with his investment in restaurant chain Giraffe however, this venture is being viewed as a small distraction to the damage control that the current Tesco CEO is working on, in order to revive the beleaguered grocer.
Michael Holmes, who was previously in charge of Tesco‘s collection of in-store restaurants and coffee shops was driven out of the business in March, as part of Lewis‘ move to consolidate the company.
In the accounts for Harris + Hoole, the directors admit that the “UK coffee market is highly competitive and already served by a number of international, national and local competitors”.