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Sainsbury’s turns on convenience store tap

Sainsbury’s is aiming to take advantage of changing trends in society including the growth in local shopping as well as the greatly improved availability of sites to crank-up the expansion of its ‘Local’ convenience chain. By Glynn Davis

GENERAL MERCHANDISE

Sainsbury’s turns on convenience store tap

Speaking at the recent BRC Annual Retail Convention in London Dido Harding, convenience director at Sainsbury's, acknowledged to delegates that Sainsbury's was much later to the convenience market than rival Tesco but that there were great benefits to be gained from this growing part of the food market.

“There are growth opportunities as it is fundamentally a great market and not just a flash

in the pan. There are changes in society, and not just as a result of the recession, but from the growth in single households, more working partners, and people's hyper-existences,” she explains.

Harding believes customers are receptive to the entry of Sainsbury's into their local areas, which when combined with the fact that only 25 per cent of the market is held by the four largest operators helps its expansionary cause.

Convenience is especially attractive to Sainsbury's as a result of a number of factors, according to Harding, who says its first store in London's Drury Lane 140 years ago was effectively a convenience store selling healthy, safe food. It also sits well with the company's core proposition of freshness, quality and range.

The company also benefits from price perception not mattering as much in the convenience sector. And its focus on customer service sits well in local stores and helps it build relationships with local communities. Its links with these communities has been helped by its recruitment of many former Woolworth employees.

Harding says the availability of many high quality people who help bring local knowledge to Sainsbury's convenience stores is one of the key reasons why Sainsbury's is accelerating the expansion of its convenience stores at the current time.

In addition, the large number of sites coming onto the market massively helps its expansion plans. “We see great sites, once-in-a-generation sites, which helps because even 30 yards the wrong side of the tube then you can be in the wrong place,” she says.

The company also has much confidence at the moment for expanding. “We just needed the confidence and in large part it's down to the success of Justin building a solid core grocery business,” says Harding.

The convenience stores also require very little capital expenditure - particularly when compared with the company's large superstores - and there is the ability to “turn the tap on and off” new store openings. At present the tap is firmly on and Harding says one store is being opened each week. And this pace will quicken next year when two units are scheduled to open their doors every seven days.

With many of these openings on high streets around the UK, there is no doubt that they are adding some vibrancy to many town centres that continue to suffer troubled times, and Sainsbury's has been very successful as the anchor tenant in a number of these towns.

This fits well with the trend for more people to shop locally to complement their regular main shopping trips to out-of-town superstores. Harding says: “The day every family shops once a week and never forgets anything won't happen.”

glynnd@theretailbulletin.com

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