Has Sainsbury found a ‘saferway’ to grow market share? Unlikely to win the tussle for Safeway’s 481 prime-site outlets – and with further high-street development already capped – Britain’s second ranked multiple is opting instead to build its presence in the upwardly mobile grazing consumer sector through over 100 Shell petrol-station forecourts, pending planning permission.
Sainsbury is no newcomer to forecourts. Its first location in Roehampton has been operational for almost three years. However, until recent events, the development strategy had appeared to have stalled at a total of six. The expansion to 100, either reflects strong conviction in the forecourt market or else the knee-jerk reaction to an impending setback on the bigger stage.
The tie-in with Shell is now extended to over 50 small-scale outlets. With some forecourt dispensed goods likely to average out at an 8% higher retail price than in the supermarkets, it presumably is a profitable venture.
The emphasis at each of the Shell sites will be on convenience products, including ready-meal solutions, fresh fruit and vegetables, bakery items and beverages. But mumblings of discontent in the City over CEO Sir Peter Davis’ recent performance – plus persistent rumours of the Sainsbury family looking to offload its 37% stake – going well with Shell might not just be constrained to a bit of shopping.