Grocers Tesco and Morrisons are thought to be among the interested parties for the 47 Netto shops that Asda has to dispose of as part of its £778m acquisition.
The shops, which average 8,000 sq ft each, are also being eyed by some of the discount retailers, alongside the other grocers Sainsbury’s and Co-op, it is understood.
The convenience store sector is a key battleground for grocers. The market is worth £30.9bn, growing 6.3% year on year, according to grocery research house IGD.
By 2015, IGD predicts the convenience sector will be worth £41.3bn.
Co-op has the largest slice with 1,961 shops but all the grocers are fighting for space. Morrisons chief executive Dalton Philips said last month he would open its first smaller shop next year.
Evolution analyst Dave McCarthy said: “Smaller-format stores are the best performing for grocers at the moment, and they all seem to be taking anything they can get. All the prime strategic sites went years ago, and they’re all still expanding.”
Once Asda sells off the 47 stores required by the Office of Fair Trading, it will be left with 147 former Netto shops. It will name them ‘Asda Supermarket’ and add its existing 26 smaller stores to the portfolio.
Asda will open its first pilot conversions in the first quarter of 2011, rather than before Christmas, due to the timetable of the sell-offs.
It said that while the number of stores to be sold was “at the high end of its expectations” it was “confident it can meet the OFT’s obligations” and that the smaller store portfolio would be a success.
McCarthy said the sell-off was “the ballpark” he would have expected. He added: “Asda will be disappointed as they wanted more but it is still a good deal for them as it fills the gap in their expansion and cements their position as the number-two operator.”
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