The initial plans for a supermarket are part of a 40-acre science and technology park, for which planning permission was granted earlier this month.
However, if the MG Rover plant finally closes, then there would be much greater scope for a hypermarket-sized outlet rather than the modest 25,000 sq ft store outlined so far.
All three supermarket giants are known to have expressed interest in the 40-acre site,
which has been owned by government-backed regional development agency Advantage West Midlands since 2003. The site was formerly part of the 450-acre Longbridge plant, of which the remainder was bought in a sale-and-lease-back deal by property developer St Modwen for £57.5m in January last year. The main supermarket in the area is a 31,500 sq ft Safeway Megastore, a mile from the plant.
However, Sainsbury is already part of a redevelopment plan for Selly Oak, four miles away, on which it intends to create a 65,000 sq ft store that would dominate the catchment.
A Tesco spokeswoman played down speculation circulating in Birmingham that it could open its biggest hypermarket in Europe on the Longbridge site.
St Modwen chief executive Bill Oliver said it was too early to know what a redevelopment might entail, but based on past mixed-use redevelopment projects, he believed Longbridge could employ 12,000 people - double the number working for the car firm. “We’re still waiting for an audience with the administrators. From there we will devise a master plan.”
Hypermarkets are an increasingly attractive offer for supermarket groups in the UK. According to ACNielsen, sales at the larger stores are currently growing 9% year-on-year, compared with just 2.6% for the grocery market as a whole.
A hypermarket at Longbridge site would be likely to employ 500 to 600 staff, which could make it an attractive option for the authorities.
Seymour Pierce retail analyst Richard Ratner said it was likely the government would rush through a deal if it created instant jobs in the area.