Sainsbury's to buy 10 Homebase stores

29th Aug 2024 11:59

(Sharecast News) - Sainsbury's said on Thursday that it has agreed to buy 10 leasehold stores from HHGL Limited, trading as Homebase, for conversion into supermarkets.

The supermarket chain said the acquired stores are in key target locations that will grow its coverage across England, Northern Ireland and Scotland, "bringing Sainsbury's quality and value to new customers and communities".

Once they are converted, the shop floor area of the stores will range from about 15,000 to 40,000 square feet and will add a total of around 235,000 square feet to the retailer's supermarket trading space.

Sainsbury's said the addition of new locations means nearly 400,000 more people will be within a 10-minute drive of one of its supermarkets. It is also expected to create an additional 1,000 new Sainsbury's roles.

The deal is expected to complete in early September and Sainsbury's aims to open the first of these stores next summer and to complete the conversion of all sites by the end of calendar year 2025.

The company said its continues to target delivery of at least £500m retail free cash flow in financial year 2024/25 and at least £1.6bn retail free cash flow over the three years to financial year 2026/27.

The acquisition and refit of the stores is expected to cost around £130m.

Chief executive Simon Roberts 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."

House broker Shore Capital said: "No notable impact upon FY25 EPS is expected, but this handy bolt-on should nicely feed into FY26 and beyond, signalling the growing capability and confidence of Sainsbury in the UK grocery arena.

"A competitive but rational market presents good ongoing opportunity for Sainsbury to us, shareholders should, in our view, be pleased with this work."