Sainsbury’s snaps up a raft of Homebase stores in a deal valued at £130m

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Grocer Sainsbury’s is buying a raft of stores from DIY specialist Homebase as it seeks to extend its presence and “offer more food choice to more customers”.

Sainsburys

Source: Sainsbury’s

Sainsburys is to buy 10 Homebase shops

Sainsbury’s has agreed the purchase of 10 Homebase leasehold branches, representing a gross investment value (the total capitalised cost of leases, acquisition premium and fit-out costs) of approximately £130m.

Following conversion the shops will add approximately 235,000 sq ft to Sainsbury’s supermarket trading space.

Sainsbury’s said the stores are “in key target locations” that will enable it to serve “new customers and communities”.

The deal represents a step forward in the retailer’s ‘Next Level Sainsbury’s’ strategy, a key element of which is to extend its reach to shoppers and deliver a bigger range.

Sainsbury’s said: “The addition of new locations means nearly 400,000 more people will be within a 10-minute drive of a Sainsbury’s supermarket. The new stores will showcase Sainsbury’s latest food offer with a refreshed, innovative look and feel and excellent sustainability credentials.”

The acquired stores are expected to “achieve strong returns, with return on capital employed in the low teens, comfortably in excess of Sainsbury’s cost of capital”.

The purchase is expected to complete in early September. The first of the stores will open next summer and conversion of all the locations should be done by the end of 2025.

The acquisition is expected to create around 1,000 new Sainsbury’s jobs. The retailer will guarantee an interview for any Homebase colleagues at risk of redundancy as a result of the deal.

Sainsbury’s 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.”