Sainsbury’s to Acquire 10 Homebase Stores for £130 Million, Plans Major Supermarket Expansion
In a significant move signaling its largest expansion in over a decade, Sainsbury’s has announced it will invest £130 million to acquire 10 stores from Homebase, converting them into large supermarkets. This strategic acquisition highlights a shift in the fortunes of two prominent British retail brands amidst evolving market conditions.
The deal will see Sainsbury’s transform the selected Homebase locations into new supermarkets across England, Northern Ireland, and Scotland. The first of these stores is slated to open next summer, with the full rollout expected to employ around 1,000 people. Homebase employees facing redundancy will be given priority for interviews at the new Sainsbury’s stores.
Simon Roberts, CEO of Sainsbury’s Group, which also owns Argos and Habitat, emphasized that the expansion reflects the supermarket’s robust performance in its food business. “Our food business continues to go from strength to strength,” Roberts stated. “We are committed to building on this momentum and growing our supermarket footprint to meet increasing customer demand.”
The move marks a notable rebound for Sainsbury’s, which had previously closed 15 large supermarkets and numerous Argos stores in response to rising competition from discounters like Aldi and Lidl, as well as the growing trend of online shopping. The expansion of Sainsbury’s footprint aligns with its strategy to capture market share through competitive pricing and a diverse product range.
Homebase, which was originally established by Sainsbury’s in 1979 and sold in 2006, has been struggling in recent years. Following a period of financial difficulty, including a £85 million loss in the year to January 2023, the DIY chain is attempting a transformation under its current owner, Hilco. The sale of these 10 stores is part of Homebase’s broader strategy to return to profitability.
The ten Homebase locations being acquired are:
– Birmingham
– Sutton Coldfield
– Bromsgrove
– Cromer
– Derry
– Fareham
– Inverurie
– Lowestoft
– Newark
– Omagh
– Rugby
This strategic acquisition represents a significant shift for both Sainsbury’s and Homebase, underscoring the dynamic nature of the UK retail landscape. While Sainsbury’s looks to bolster its market position with this expansion, Homebase continues to seek a path to financial stability amid a challenging retail environment.