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Convenience the key for Sainsbury’s

Sainsbury’s has put plans to open 50 new convenience stores by the end of March 2011 at the centre of its strategy for growth.

The supermarket giant is targeting much of its development activity in the North and West, where it says it is under-represented.

In the first half of the 2010/11 year Sainsbury’s opened seven new stores, nine extensions and 13 convenience stores - adding 50,170 sq m of space in total.

Its floor space growth is expected to reach 8 per cent this year and to have grown 15 per cent in the two years to March 2011.

The firm said it would aim to maintain these levels of growth into next year, delivering about 140,000 sq m of additional space in 2011/12.

Chief executive Justin King said: “Convenience stores’ online sales are growing by over 25 per cent and the bank has delivered strong profit growth.

“We have added gross space of 540,000 sq ft [50,167 sq m] to our store estate, opening or extending 29 stores and creating over 2,000 new jobs with Sainsbury’s.”

The Sainsbury’s tier one contractor framework includes RG Group, Bowmer & Kirkland, Kier Retail, ISG Pearce, Base Build Services, Longcross Construction, S Dudley & Sons and Williams Southern.

Planet Retail global research director Robert Gregory said the convenience store growth trend was likely to be permanent and the market would continue to see large retailers make acquisitions of small stores.

“There are empty spaces in the high street due to the strain economic conditions have placed upon the market and retailers are well placed to capitalise - perhaps the best example is Asda’s acquisition of Netto.”

Mace announced the appointment of former RG directors Matt Gordon and Neil Hennessy in September and is looking to boost its share in the retail sector.

Last week, Mr Gordon told Construction News he saw particular potential for growth in the convenience store and high street market as obtaining planning for superstores was becoming increasingly difficult.

Sainsbury’s is able to secure further development opportunities at the same pace it opens stores as it has more than 70 planning consents for extensions already in the pipeline.

Sources say the retailer is a particularly demanding client and is intent on delivering industry-leading initiatives, aimed at reducing impact on the environment and improving its investment returns.

As part of its ‘build more for less’ initiative, a newly extended store in Crayford, Kent, achieved a world first through the use of geothermal technology to use energy from the earth to heat or cool the store.

As a result of this and other energy-saving innovations, the store’s mains energy consumption has reduced by about a third, despite it more than doubling in size.

 

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