German coffee firm Tchibo scales down UK business

HAMBURG Wed Nov 26, 2008 12:08pm EST

HAMBURG Nov 26 (Reuters) - Germany's largest coffee roaster Tchibo said on Wednesday it would scale down its business in Britain because of the current weakness in the retail market.

A Tchibo spokesman said cooperation with British supermarket chains Somerfield and J. Sainsbury (SBRY.L) would be ended in 2009, confirming earlier German press reports. [ID:nLQ94408]

The two British supermarkets have about 100 Tchibo stand-alone sales points in their stores.

Tchibo was also considering closing its own 50 branches in Britain, mostly in southern England, the spokesman added.

Tchibo had previously said it planned to build up a national chain of coffee shops in Britain selling a mixture of coffee and other consumer goods ranging from clothes to electronics.

The reason for the decision was the current poor state of the British economy, the spokesman said.

Tchibo started expanding in Britain 7 years ago. In March the company said it would no longer make major investments in the country, it would close its activities in France and the Netherlands and instead concentrate on eastern Europe.

The company has also announced the closure of a series of coffee shops in its core German market, where it has suffered intense competition from discount supermarkets.

(Reporting by Michael Hogan and Jan Schwartz; Editing by David Evans)

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