Bells is just the start of big c-store ambitions says Sean McAllister
Weller said JS wanted to get sufficient critical mass to create an efficient operation in the supply chain for c-stores.
“If that means 1,000 stores, then great!”
Sainsbury has developed a specialised supply chain for small stores but it is the first to admit that it wants to raise its expertise in c-store distribution by tapping into Bells’ experience. Bells’ joint MD Steven Bell agreed the chain had much to teach the giant multiple about supplying local c-stores. “We have a lot of experience in distributing to smaller stores,” he said.

Weller said Steven Bell would help apply lessons from the Bells chain to the wider Sainsbury c-store portfolio.

The ink was barely dry on our latest Top 50 ranking of independent retailers, published last week, before another member was snapped up by a major multiple.
This week the buying frenzy in the £21.5bn c-store sector went up another gear as Sainsbury gave a boost to its c-store credentials by buying Teesside-based c-store chain Bells, number 15 in The Grocer Top 50.

The move will boost Sainsbury’s £18.5bn turnover by just 0.3%, and the chain will remain a standalone operation. And Bells will continue to operate as a separate business and retain its HQ, distribution centre and fascia. Very little will change.

The acquisition, if you include the 100 c-stores JS plans to open on Shell forecourts, will take its c-store estate to about 220 stores.
But the move is part of a bigger jigsaw in the long term. “It is not a one-off,” said deputy MD of Sainsbury’s Supermarkets, Sara Weller.
“It would be an odd move if it was. We now have 220 c-stores and it is likely in the mid term we will have at least 500 with the possibility for more.”
Meanwhile, with its purchase hot on the heels of Tesco’s Adminstore deal, Sainsbury has got a good price. According to a source close to the multiple, it is paying between £200,000 to £400,000 for each store, a total value of £10.8m-£21.6m - much less than the £1.2m Tesco is offering Adminstore for each Cullens, Europa and Harts stores.
Meanwhile, analysts rate the 54-store chain very highly and approve of the acquisition. “Bells is a good business in the right part of the country for Sainsbury. The deal makes sense as convenience is a growing and attractive part of the market which lends itself favourably to Sainsbury’s pricing strategy,” said one analyst.
Another described the deal as a “good, sensible acquisition”.
They’re right. Bells’ stores, averaging 2,000 sq ft, have a total turnover of £56.4m and growth of 8.7%. It has experienced and well-respected management in the shape of Steven Bell and David Graham and good IT and in-house distribution systems.
Bells also sees it as a good marriage in terms of product range.
Steven Bell said: “Sainsbury is strong in chilled and fresh produce, we’re strong on news, alcohol and a more traditional convenience store offering.” He added that the major focus now would be on how to introduce Sainsbury’s chilled and fresh offerings. It had already identified two stores to be used for a trial.
Sainsbury has a fair few acquisitions to make if it is to catch up with Tesco in the convenience game. But, according to Goldman Sachs, it is still in talks to buy 1,200 strong TM Retail.
But the acquisition of Bells shows it’s willing to buy smaller well-run operators. And if you’re an independent retailer, then hold tight because it really does seem that The Grocer Top 50 has become the shopping list for Sir Peter and Sir Terry.