Tesco chief executive is likely to focus on small stores and scale-back store expansion as part of his new strategy for the UK’s largest retailer.

Sources close to the retailer said Clarke is likely to scale back larger store and extension openings, the Financial Times reports.

Tesco joint broker Nomura said a “phased reduction” in Tesco’s UK stores away from large Extra stores and towers small formats was likely.

Nomura analyst Nick Coulter said: “Changes to the store pipeline will take time to work through but by removing the largest extensions and new builds we think the amount of space laid in the UK every year will fall in the order of 15%.“

Coulter said Tesco’s share of planned store expansion in grocery could fall up to 25% without impacting its total market share.

Joint broker JP Morgan Cazenove predicts Tesco will invest £800m over two years on refurbishing tired stores.

Clarke is also expected to extend Tesco’s click and collect service to all of its 2,300 stores.

Tesco declined to comment.

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