The Channel Islands are poised to become a battleground between major mainland retailers including Tesco and Carrefour as politicians there invite them to bid for sites.
The Grocer has learned there are at least three sites up for grabs that are suitable for supermarket developments.
Tesco has already put in a bid for one site. And representatives of Carrefour, the French hypermarket chain, are meeting members of Jersey’s parliament later this month to discuss how it could benefit the retail market.
The news follows Tesco’s revelation in the Guernsey press that it had designs on the island
(‘Tesco eyes Guernsey’, The Grocer, April 30, p5). Proposals to invite other retailers on to the islands stem from a row over CI Traders’ purchase of the two Safeway stores on Jersey and Guernsey for £51m in April. Following the acquisition, Senator Philip Ozouf, vice president of the finance and economics committee in Jersey’s parliament, joined other politicians in questioning CI Traders’ retail power on the islands. The company also owns the Checkers and Checkers Express formats, including many converted Le Riche Stores.
Allan Smith, chief executive of Channel Islands Co-op, the other major grocery retailer on the island, recognised the Channel Islands could be a sound investment for retailers.
However, he said there were barriers to entry. “The huge cost of getting goods to the islands knocks 5% off the bottom line. Personnel costs are 40% higher than in the UK, building costs are 50% higher and land costs are astronomical.”
CI Traders completed its acquisition of the Safeway stores on April 30, the day before new competition rules came into force on Jersey. Since then, competition authorities have been exploring grounds for legally challenging the move.
Responding to concerns about its retail dominance, CI Traders has agreed the two stores will continue to trade as Safeway of Jersey and Safeway of Guernsey. They will be run by a separate board. Since Morrisons’ suppliers withdrew from the stores, they have been forced to source products from local suppliers.
This has forced up prices, intensifying local opposition to the company.
Rod Addy