According to a report in one Sunday newspaper, the board of Sainsbury’s has plans to invest about £750 million a year to expand and refurbish its supermarkets as part of a wide-ranging strategic review.
City sources told The Sunday Times that Sainsbury’s executives have been embroiled in “Project Champion” meetings over the past few weeks, well before prospective takeover negotiations had concluded.
The supermarket group would create 15,000 jobs if the plans are implemented, a 10 per cent addition to its workforce, and open an additional 4m sqft of new supermarket space, the report claimed.
The CVC-led private-equity consortium is said to have tabled the plans before pulling out of bidding for the retailer earlier this month. But the numbers were “drawn from Sainsbury’s own business plan, which it had quietly discussed with leading investors”.
The report said: “The new floorspace will include a mixture of new stores, mezzanine floors and extensions. About £250m of the planned £750m annual capital expenditure will be spent on refurbishing stores. The remaining £500m will be spent on developing new outlets. The capital expenditure budget has been boosted by more than £100m a year from recent investment levels.”
The transformation will not happen overnight, however. Property experts said “it could take until 2014 for many new stores to open, by the time Sainsbury’s has bought land and battled through the planning process”.
No comments yet