Co-op disposals spark convenience space race

The Co-operative Group has put 40 shops up for sale, sparking a space race among grocery giants desperate to expand their convenience estates.

Big grocers including Tesco and Sainsbury’s are thought to be eyeing the stores and a feeding frenzy may result as they jockey for greater exposure to a £32.1bn market.

Upmarket grocer Waitrose is also hunting for smaller stores for its fledgling convenience chain, and Morrisions aims to kick-start a convenience store trial this year. A value retailer is also thought to be keen on several of the Co-op properties.

The fast-growing convenience market is expected to continue to outperform the rest of the food and grocery sector, excluding online, according to industry body IGD. Convenience sales are forecast to grow 5.8 per cent per year and be worth £42.6bn in 2015.

Any good c-store space that comes to market is typically hotly contested as Tesco seeks to strengthen its grip and its competitors seek to play catch-up.

Tesco gained a lead by moving into the convenience sector early and snapping up chains such as One Stop. In December it bought 77 stores from Mills Group under its One Stop banner, sparking calls from rivals for a competition inquiry. There are now relatively few chains the big grocers could buy, making the Co-op disposals especially interesting.

Morrisons is likely to take a close look at the Co-op shops as it prepares to begin its trials to start this year. The supermarket group is close to signing for its first convenience store, and is thought to be looking at sites in Machester, Leeds and Liverpool. It is considering names including M Local and Morrisons Local.

For full story see subscription site RETAIL WEEK

Have your say

You must sign in to make a comment.