The High Court has ruled that a loss-making independent homeware retailer in a Tesco Ireland superstore does not have to continue to stay open pending the full hearing of a dispute over a “keep open” clause in a licensing agreement between them.
Judge Marguerite Bolger said she was not satisfied that the balance of convenience or interests of justice favoured or required compelling the Choice Stores outlet to continue to trade against their wishes in Tesco, Bath Road, Poleberry, Co Waterford.
It would fly in the face of commercial standards of conduct to require the defendant, Multi Home Retail, trading as Choice Stores, to do so between now and the trial of the action, she said.
Choice has occupied a 13,239sq ft (1,230sq m) unit in the shared superstore area at an annual licence fee of about €214,000 since September 2024. By December 2025, it notified Tesco it was not commercially viable and sought to break the licensing agreement, which it said it was entitled to do, but Tesco said it was not.
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Earlier this year, Tesco applied for an injunction requiring the defendant to “keep open” its business as per the terms of the 10-year licensing agreement, which it said only allowed Choice to terminate after five years.
An injunction hearing was scheduled after the defendant agreed to keep the outlet open until the court’s determination.
In a judgment, Bolger refused to grant Tesco its “keep open” injunction.
The judge said it was common case between the parties that the defendant’s business at Poleberry has been running at a loss for some time.
The defendant’s accounting expert concluded that the shop was not financially viable and is being subsidised by the defendant’s other stores around the country, all of which are financially viable and successful, she said.
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The expert also said the homeware store was structurally loss-making and projected to remain loss-making, she said.
Tesco argued, among other things, that if the defendant is allowed to unilaterally abandon its contractual obligations it would create a serious risk of a damaging precedent.
Tesco said it runs a significant risk of emboldening its other licensees to similarly disregard their obligations and cease trading without consequence.
The judge said she saw no reason why other licensees might take such a step unless they are, like the defendant, trading at a loss.
In line with previous case law, she said it would be against the public interest, unwise and would fly in the face of commercial standards of conduct to require the defendant to do so between now and the trial of the action.
