Sainsbury’s has agreed a deal to acquire 10 leasehold stores from Homebase with plans to convert them into new supermarkets.
The group noted that the stores are in key target locations that will grow its coverage across England, Northern Ireland and Scotland.
Once converted, the shop floor area of the acquired stores will range from 15,000 to 40,000 sq. ft. and will add a total of around 235,000 sq. ft. to Sainsbury’s supermarket trading space.
The group highlighted that the new sites will mean nearly 400,000 more people will be within a 10-minute drive of one of its supermarkets.
Sainsbury’s expects to open the first of the new stores next summer, with the aim of completing all the conversions by the end of 2025. The process will create around 1,000 new roles, with Sainsbury’s pledging to guarantee an interview for any Homebase staff who have been impacted by the deal.
The gross investment value of the acquisition, including the cost of leases and fit-out expenses, is expected to be approximately £130m.
“Sainsbury’s food business continues to go from strength to strength as we push ahead with our Next Level Sainsbury’s plan,” said Chief Executive Simon Roberts.
“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. We want to build on this momentum, which is why we are growing our supermarket footprint. 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.”
Last month, it was reported that Homebase’s owner, Hilco Capital, was discussing selling the DIY retailer to fast-growing general merchandise chain The Range after receiving a takeover approach.
Hilco took control of Homebase in 2018 following a disastrous spell under the ownership of Australian retail group Wesfarmers. The chain then went through a company voluntary arrangement (CVA), which led to the closure of a substantial number of stores and renegotiated rent deals. This succeeded in stabilising the business, but its performance in the last couple of years has been impacted by the pandemic and subsequent cost-of-living crisis.
Accounts filed at Companies House show Homebase lost more than £80m in the year to January 2023, although trading since is understood to have been significantly better.
NAM Implications:
- And why not?
- Sainsbury’s on a roll
- Growing share
- Some gaps in national coverage
- Watch them go.
- And ensure you get fair share of sales…
