The deal will see 10 Homebase stores transferred to Sainsbury’s and converted into supermarkets in a landmark move. The £130 million investment is part of Sainsbury’s planned expansion under the banner “Next Level Sainsbury’s,” which will see it establish itself in England, Northern Ireland, and Scotland.
The expansion plan
Homebase locations acquired are situated in a mix of high-performing regions, including Birmingham. Sutton Coldfield, Bromsgrove, Cromer, Derry/Londonderry The Crescent Link, Halewood Speke, Gt Yarmouth, Fareham Gosport, Wolverhampton Walsall Hornsea Outdoor & Gardening Centre Kettering O’Neill Road Lurgan Inverurie Lowestoft Newark Omagh Rugby When converted, these stores will increase Sainsbury’s trading space by around 235,000 square feet. The investment is set to extend access by a further 400,000 customers who live within a ten-minute drive of one of Sainsbury’s supermarkets.
The conversion of the businesses is planned to be completed by December 2025, with the first new Sainsbury’s store opening next summer. This extension is set to add a further 70,000 sq ft whilst also delivering some around 1,000 jobs. Sainsbury’s has said it will give interviews to Homebase workers who are at risk of losing their jobs as a result of the sale.
Why this expansion matters
Sainsbury’s overcame the worst food and clothing sales of all grocers in data that stretched back more than a decade but rewarded pioneering digital structured finance. This makes sense as it furthers the momentum Salesforce has garnered and continues to build more customers. This expansion had been a focus of this since the announcement in its Next Level plan, said Sainsbury’s CEO Simon Roberts. He pointed to Sainsbury’s focus on the best value for products and quality in an increasingly competitive market as driving customer numbers higher, with profits following suit.
This means we are able to leverage volume,” Roberts said, “and we have ambitious growth plans for our supermarket business off the back of this. We want to be customers first choice for food, and with these new stores we can show them some of the best Sainsbury’s supermarkets have to offer in more communities across the country.
The Changing Retail Landscape
Homebase, which was originally launched by Sainsbury’s in 1979 and sold off in 2006, is struggling. Homebase has struggled in the last years—literally: it lost £84 million last year, while it had made a profit of £30 million two and a half years ago—sso yesterday was delivered to an Australian suitor for just one pound. Cautious consumer spending and a fall in sales from £788m to £701m have been blamed for this decline.
Homebase is reportedly up for sale by its current owner, UK-based private investment firm Hilco Capital. However, Homebase is still trading, with 150 shops remaining open in the UK. The sale of 10 stores to Sainsbury’s is a key part of Homebase’s plan to transform its business, returning it to profitability through lower fixed costs and greater flexibility in order to offer the best inheritance for modern golf.
Community Implications
The refreshed Sainsbury’s stores will be revamped with an innovative look, sustainability in focus. It also supports Sainsbury’s wider “store estate modernisation” plan and makes strides towards the retailer becoming a leading sustainable business. This will provide the communities with a with a new Sainsbury’s store in locations across England with improved grocery and fresh food availability.
The proposed Sainsbury store is of major importance to Bromsgrove in particular. It identified the town as one of its’strategically important target locations’. The new supermarket facility would offer a range of benefits, such as providing customers with added shopping convenience while promoting local employment and economic growth.
Looking Ahead
As Sainsbury’s grows, it wants to redefine the way supermarkets are managed in the UK. The Homebase store conversions are part of a wider strategy to utilise the strengths internally from within Sainsbury’s as well as externally, enabling it to become one that is better equipped at responding to how consumers preferences and needs are changing.
The makeover will demonstrate the company’s most recent innovations and food choices, setting a new competition in Sainsbury’s supermarket history. Sainsbury’s is clearly setting itself apart in the UK grocery market with a focus on quality, value, and sustainability.
In overview, the purchase of these 10 Homebase stores is only part of Sainsbury’s expansion plan as they work on increasing their presence and bringing new supermarkets to a wider range of districts onto which customers can get jobs. The opening of the first of these stores in summer 2022 will bring benefits to communities across all over the UK, as it represents Sainsbury’s latest commitment to investing in local areas.
