The newly converted supermarkets will showcase Sainsbury’s latest food offerings. Credit: J Sainsbury plc.

British supermarket chain Sainsbury’s has agreed to buy ten leasehold stores from home improvement retailer HHGL, which operates as Homebase. 

The locations will be transformed into big Sainsbury’s supermarkets.  

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The strategic move is part of the company’s Next Level Sainsbury’s plan, aimed at expanding food choice and supermarket coverage across England, Northern Ireland and Scotland. 

The stores, varying in size from 15,000²  to 40,000ft², will collectively add 235,000ft²  to Sainsbury’s supermarket trading space.  

The expansion places 400,000 more people within a ten-minute drive of a Sainsbury’s store.  

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The company anticipates the new stores will provide strong returns, with return on capital employed expected to be in the low teens, surpassing Sainsbury’s cost of capital. 

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The first of the new supermarkets is scheduled to open in the summer of 2025, with the full conversion of all sites expected by the end of that year. 

The total capitalised cost, including leases, acquisition premium and fit-out costs, is will be £130m ($171.41m).  

The development will create 1,000 new roles within Sainsbury’s, and the company has committed to offering interviews to Homebase employees affected by the acquisition. 

Completion of the deal is anticipated in September 2024. 

J Sainsbury CEO 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.” 

In May 2024, Sainsbury’s entered a five-year strategic partnership with Microsoft to use AI to enhance customer and colleague experiences.