Sainsbury’s has bought a portfolio of ten Homebase stores, which it intends to convert into new supermarkets across the UK as part of a £130million investment.
The stores are located across England, Scotland and Northern Ireland, and will bring 400,000 Britons within a 10-minute drive of a Sainsbury’s supermarket when they are launched.
Sainsbury’s said the stores will each be 15,000 to 40,000 square feet in size, adding a total of around 235,000 square feet to its total estate, and lead to the creation of approximately 1,000 new roles.
Sainsbury’s acquires Homebase stores in latest push to grow food sales
The food-focused stores will also have a ‘refreshed, innovative look and feel and excellent sustainability credentials’, the group said.
Sainsbury’s has been gradually increasing UK grocery market share this year and is on track to post a retail underlying operating profit of £1.01billion to £1.06billion for 2024, representing annual growth of 5 to 10 per cent.
At its capital markets day in February, the group pledged a cost savings target of £1billion over three years and to drive growth in food sales volumes.
Sainsbury’s said on Thursday its newly acquired stores are in ‘key target locations’, bringing ‘Sainsbury’s quality and value to new customers and communities’.
It added: ‘We expect the stores to achieve strong returns, with return on capital employed in the low teens, comfortably in excess of Sainsbury’s cost of capital.
‘We will open the first of these stores next summer and we aim to complete the conversion of all sites by the end of calendar year 2025.’
The purchase and refitting of the new sites is expected to be approximately £130million.
Sainsbury’s boss Simon Roberts said: ‘Sainsbury’s food business continues to go from strength to strength as we push ahead with our Next Level Sainsbury’s plan.
‘We have the best combination of value and quality in the market and that’s winning us customers from all our key competitors and driving consistent growth in volume market share.
‘Our ambition is to be customers’ first choice for food and these new stores will showcase some of the best that Sainsbury’s supermarkets have to offer to even more communities around the country.’
Sainsbury’s shares were up 0.6 per cent to 290.6p by midafternoon on Thursday, bringing on-year gains to around 8.9 per cent.
Equity analyst at Shore Capital Clive Black said the move signals ‘the growing capability and confidence of Sainsbury in the UK grocery arena’.
He added: ‘A competitive but rational market presents good ongoing opportunity for Sainsbury to us, shareholders should, in our view, be pleased with this work.’
Where are the new stores?
The location of the ten stores Sainsbury’s has bought from Homebase:
England
- Bromsgrove
- Birmingham Sutton Coldfield
- Cromer
- Farnham
- Lowestoft
- Newark
- Rugby
Northern Ireland
- Derry
- Omagh
Scotland
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