Sainsbury’s is looking at building a Sainsbury’s local franchise system for working with independent retailers, according to comments made to the Guardian by company CEO Mike Coupe.
The supermarket began trialing a franchise model whereby Euro Garages manage Sainsbury’s stores on six of their forecourt sites in October last year.
Though Sainsbury’s originally hoped to open 100 Sainsbury’s local convenience stores per year they’ve struggled to achieve this. They are currently planning just 25 site launches in 2017.
Speaking to the Guardian, Mike Coupe stated, “When we look at how we grow our business, then a franchising model has some attractions to it if we can maintain control of the brand.”
British Franchise Association CEO Pip Wilkins explained to Retail Express that, “Sainsbury’s are not the first, and won’t be the last to adopt this growth strategy.”
Describing the opportunity this represents for shop owners, Wilkins continued, “In recent years the independent convenience retailer has struggled, however with the support, marketing and purchase power of a franchisor, a win win situation can be created as the franchise owner is able to leverage franchisor brand reputation and know-how and the franchisor can gain market traction in areas where suitable commercial properties may not be readily available.”
Bintesh Amin, owner of Blean Londis was supportive of the potential move by Sainsbury’s. When asked by Retail Express whether he’d consider a Sainsbury’s franchise, he said “yeah, why not?” Citing business diversification as a motivation.
Gaurave Sood, owner of Neelam – Convenience & Post office was also supportive stating, “Would love the name above our door, it will be at a cost but if you have the sq foot area and associated turnover, those terms should be negligible and favourable.”
However, others shop owners asked by Retail Express were skeptical that the local franchise plan would make it past the trial stage.
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