The multiples’ grip on the convenience sector tightened last week after two of the big four opened dedicated distribution hubs in the North of England and London.
Morrisons paved the way for the expansion of its M Local network in the North after opening a distribution hub in Bury. The 150,000sq ft centre has the potential to service more than 100 M Local stores and adds to Morrisons’ West London distribution hub, which opened in March to provide for its South Eastern convenience stores.
The two centres will support the opening of the 62 sites acquired from Blockbuster, HMV and Jessops earlier this year.
Sainsbury’s opened a 250,000sq ft distribution centre in Thameside, South East London, which will support 200 Sainsbury’s Local convenience stores from London to Brighton.
The company said it planned to open 50 new Local stores by early 2014.
East London retailer Kay Patel, who owns four Best-One stores in Stratford, said the multiples had made it increasingly difficult to buy new sites in the capital in recent years. “I approached East Thames housing organisation about a site, and even though we fit the criteria in terms of our local roots, I know Tesco or Sainsbury’s will get there before me. I was gazumped by Sainsbury’s recently. The situation is even worse now that Morrisons has entered the convenience sector.”
But award-winning Spar Walthamstow retailer James Brundle said the key was to look for “quirky” sites. “We’ve found a site which is going through planning at the moment. If I’d been looking for a more conventional site it would have been more difficult to purchase. You just have to keep an eye out for something different,” he said.
Tesco expanded its Express c-store network by 9.9% to 1,337 stores in the 12 months to the end of March, according to the Grocery Retail Structure 2013. The number of Sainsbury’s Local stores rose by 20% to 498, while Morrisons moved up to 14 M Local stores in the period.