Tesco's boss knows which side his bread is buttered

Outlook

Tesco’s new boss Dave Lewis has decided to buy out Euphorium completely ( Jeff J Mitchell/Getty Images)

The much-reviled regime of Philip Clarke at Tesco wasn’t entirely bonkers. While his takeover of the Giraffe restaurant chain always seemed an unnecessary distraction from the struggling core grocery business, he did do other, cannier deals – notably, Tesco’s partnership with the posh Euphorium Bakery group.

The difference between the two transactions is plain. Giraffe was bought in what seemed a desperate bid to use up space in Tesco’s out-of-town and out-of-touch hypermarkets. There was scarce natural crossover with the stores themselves.

Euphorium, on the other hand, fitted perfectly in-store immediately, with its sour doughs and artisan breads complementing Tesco’s cheaper bakery goods.

It has proved particularly popular in the posher corners of the country, offering differentiation from Aldi and Lidl for wealthier shoppers.

Now, despite Tesco’s new boss, Dave Lewis, pulling the plug on many of the non-core businesses, he’s decided to buy out Euphorium completely.

While the deal is small potatoes for a business the size of Tesco, the City has rightly welcomed it as proof that Mr Lewis is taking a measured approach to fixing the business he inherited.

Meanwhile, the Euphorium founder Danny Bear, who set up the business in 1999 with a single bakery in the Labour-luvvie heartland of Islington, walks away with his pockets stuffed full of Tesco’s bread. Good luck to him.