Sainsbury’s acquires 10 Homebase stores for conversion

Sainsbury’s has reached an agreement to acquire 10 leasehold stores from Homebase, which it intends to convert into supermarkets.

The acquired stores are in key target locations as Sainsbury’s looks to increase its coverage across England, Northern Ireland, and Scotland.

Once converted, the shop floor areas of the new Sainsbury’s supermarkets will range between approximately 15,000 and 40,000 sq ft, adding a total of 235,000 sq ft to the retailer’s total trading footprint.

The transaction is expected to completed in early September, with the first opening anticipated next summer. Sainsbury’s is targeting the conversion of all of the sites by the end of the 2025 calendar year.

Sainsbury’s said the gross investment value of the acquisition – being the total capitalised cost of leases, acquisition premium and fit-out costs – is expected to be approximately £130m. The retailer expects the stores to achieve strong returns, with return on capital employed in the low teens, comfortably in excess of its cost of capital.

Simon Roberts, chief executive officer of Sainsbury’s, said: “Sainsbury’s food business continues to go from strength to strength as we push ahead with our Next Level Sainsbury’s plan. 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.”

The Homebase stores Sainsbury’s is acquiring are located in:

• Birmingham Sutton Coldfield
• Bromsgrove
• Cromer
• Derry/Londonderry
• Fareham
• Inverurie
• Lowestoft
• Newark
• Omagh
• Rugby