After two decades of aggressively buying up land and building stores, the company is understood to be keen to scale back on opening new, large, out-of-town hypermarkets in favour of using the capital to invest in its existing store portfolio and expand its Express network of convenience shops.
It also wants to grow its click-and-collect service, which allows shoppers on the Tesco website to pick up goods, especially non-food items, from their local supermarket. At the last count just 500 of its 2,800 shops were able to offer the service.
The move by Tesco to concentrate on its smaller shops follows its disastrous profit warning that it issued in January, the first in more than 20 years, and which wiped £5bn off its share price.
Analysts, however, warned that though Tesco should initially save money by scaling back its investment in large stores, it would have a long-term problem on its hands.
Jonathan Pritchard, analyst at Oriel Securities, said: "What are they going to do with all that land? Some of it can be reverted to residential property, but it has more than £1bn-worth of property in its landbank."
Town halls in England and Wales have called for more powers to tackle High Street takeaways, strip-clubs and bookies, which they say could damage local economies.