The Sunstar group has sold a number of its London-based Costcutter stores to the Co-operative Group, as it seeks to expand on foreign shores.
In total six Sunstar stores, and four Costcutter sites which are owned by the Tothaal Group, have been sold, with plans to start trading as Co-operative food stores before Christmas.
Sunstar Group chairman Najib Khan told Convenience Store that supermarket expansion had rendered growth in the UK difficult, and that better opportunities now lay overseas.
“Business in the UK today is good, but it’s challenging,” he said. “The economy is still far from mended and the multiples are getting more and more clout, buying up the good sites before we even get a look in.
“We are resisting, but in the long term it’s only going to get tougher. We currently have 16 stores but we haven’t bought a new one in the UK for two years now. Whenever one comes along the multiples just get there first. And that’s just the sites that get on to the market, there are many more that we never even get a chance to bid on as the developers simply approach the multiples first.
That’s why we’re so excited about prospects in Morocco. It’s an entirely different type of market,” he said.
The Sunstar Group recently opened a Costcutter store in Marrakech, Morocco, and just last month, a Costcutter in Karachi, Pakistan.
The Co-operative added that it was “particularly focussed on expanding in London,” and was actively acquiring stores, either leasehold or freehold, between 2,000sq ft and 4,000sq ft.
“This acquisition marks another important step in our plans to expand and follows our acquisition of the David Sands chain in Scotland earlier this year and the opening of a large number of new stores across the country,” Steve Murrells, the Co-operative’s chief executive for food retail, said.