Supermarket chain Sainsburys has announced a £432m store expansion programme as it continues its pursuit of market leader Tesco .
The UK’s third largest grocery retailer has raised the extra cash through a share placing and bond issue to expand its retail space by at least 15 per cent, or 2.5 million sq ft, by March 2011.
Under the plans it will extend 50 existing stores and open 50 new ones in areas of the country where it has a weak presence, such as the north and west of England, Wales and Scotland.
The aggressive expansion programme comes after the group reported a record 7.8 per cent rise in underlying first quarter sales, excluding VAT and fuel, dwarfing that of Tesco, which last week posted a 3.3 per cent increase in like-for-like sales.
Sainsbury’s also saw the second fastest annual growth in market share at the expense of Tesco, according to the latest TNS Worldpanel data.
Chief executive Justin King said: “Over the past four years we have reinvigorated our business and demonstrated the strength of Sainsbury’s brand with 18 consecutive quarters of like-for-like sales growth.
“The fundraising announced today will provide us with the financial flexibility to take advantage of current opportunities to grow our business further and faster.”
Sainsbury’s is also looking to expand its convenience store business, with 50 new stores planned for the current financial year and another 100 the year after.
