Sainsbury's to spend 950 million of EUR on more stores

Sainsbury's is set to spend between 850-900 million EUR on building, extending and refitting stores in 2010 to increase its presence in the UK market.

 

Having enjoyed better than expected hikes in annual profits, the chain seeks to take full advantage and increase its collective floor space by 5% in the coming two years.

 

As Sainsbury's marks its 140th anniversary, it does so with an increasing rate of annual expenditure, which during a recession is an encouraging sign and one that will put the chain in good stead for the desired extension and redevelopment plans.

 

In 2008, the yearly expenditure reached 910 million EUR; this year's is forecasted to reach 926 million EUR. So the group is looking to spend up to 960 million EUR in 2010.

 

The outlay on building and refurbishment costs comes in direct contrast with that of Tesco, whom last month was criticised for not paying sufficient funds for quality work from the building trade. Sainsbury's wants to advance in the market through a combination of building new stores, and making improvements to existing ones.

 

Last year, thirteen new stores were opened, thirteen refurbished, and twenty-one were extended. This resulted in a gross floor space of 4%.

 

Sainsbury's is launching two property joint ventures, with Land Securities and British Land - the latter currently developing twenty-five supermarkets in the UK.

 

CEO Justin King said that Sainsbury's is now in a strong position to take advantage of an increased amount of opportunities to further its portfolio of branches, and better rates.