International supermarket chain Tesco is making moves to expand its portfolio and perhaps compete with Walmart in revenue. As the third-largest retailer in the entire world and the largest in the UK, client meetings and emails could soon be picked up alongside a jug of milk and a carton of eggs under a new deal between Tesco and flexible office operator IWG.
First opened in May of this year, IWG is testing out a 3,800 sq. ft. flexible working area within Tesco’s New Malden supermarket in South London, which will have room for 12 private desks, 30 coworking members, and a meeting room.
Prices will range from 93 pounds ($115 USD) for a five day a month membership to from 216 pounds for a full month.
“We are always looking to serve our customers and communities better and we will be interested to see how they respond to this new opportunity,” said Louise Goodland, Head of Strategic Partnerships with Tesco.
Although Tesco’s decision to break into the coworking industry is an interesting bid, there’s a lot that led up to the move. The deal has been years in the making, as online shopping has risen in the past decade and grown exponentially throughout the pandemic. People just don’t buy electronics in brick-and-mortar stores the way they used to, Timeout reports.
Since Tesco has a vast area of free space where it used to store things like CDs, DVDs, and electronics, its owners decided it was time to make a change. That realization came at the same time that coworking spaces and flexible work were rapidly gaining traction as the pandemic forced many companies to close their offices.
The idea behind the partnership between IWG and Tesco is that more people are seeking out hybrid work models that allow them to spend at least part of their time working remotely. Companies that want their employees to work from some sort of shared space will have to compromise, offering up office options closer to where people live.
“People don’t want to spend hours commuting every day and instead want to live and work in their local communities,” said IWG CEO Mark Dixon. “A Tesco Extra in a suburban location, in the middle of a vibrant local community, is the perfect location for flexible office space.”
IWG is all in on its expansion of coworking spaces, calling the shift “irreversible.” The enthusiasm is understandable, given that the company generated more profits in the last quarter of 2021 than it has in any period for the past 30 years.
Research from IWG found that 72% of surveyed workers would prefer flexible work conditions. Throughout 2022, the company says it plans to add 1,000 new locations to its hub of flexible offices, though it didn’t say how many of those will be based in Tesco stores.
“New locations in suburban areas will transform communities and are a response to the growing demand we are seeing from customers who want to live and work locally,” said Dixon.
Tesco’s coworking space in South London will be available to clients for a fee and will be managed by IWG.
Though this move is experimental, it coincides with a larger trend of excess space being converted into coworking hubs, especially in the retail sector. If the strategy proves to be a success, Tesco says it’ll double down on its efforts and integrate coworking spaces at further locations outside of London.