Sainsbury’s is considering expanding its convenience store chain by offering franchise deals to independent retailers as it struggles to find suitable new sites. The UK’s second biggest supermarket chain said it planned to open just 25 of its own Sainsbury’s Local convenience stores this year, down from 41 last year and 66 the year before. It once hoped to open about 100 a year.
The move comes as Tesco attempts to take over cash ’n’ carry business Booker, which controls the Premier, Budgens and Londis franchise businesses, while Morrisons revives its Safeway brand to wholesale to independent convenience stores.
Mike Coupe, Sainsbury’s chief executive, said it was becoming increasingly tough to find suitable sites. Sainsbury’s is currently testing a franchise arrangement on eight Euro Garages petrol forecourts. Coupe said it could be a lower-cost alternative to leasing or buying its own stores. “When we look at how we grow our business, then a franchising model has some attractions to it if we can maintain control of the brand,” he said.
Convenience stores are viewed as a major pillar of growth for Sainsbury’s as shoppers buy less in big stores.
The supermarket chain’s pre-tax profits slid by 8% to £503m in the year to 11 March despite a near-13% rise in group sales to £29bn, partly thanks to the acquisition of Argos last year.
