Sainsbury’s has scrapped its wholesale business to focus on its key operations, days after revealing sales growth had ground to a halt.
The move was revealed by convenience chain Simply Fresh, which has had five stores supplied by the supermarket since January 2020.
“SimplyFresh has been informed by Sainsbury’s they have taken the unilateral decision to close down their entire wholesale business in the UK,” it said in a statement.
“SimplyFresh no longer has an ongoing agreement with Sainsbury’s to supply their products.”
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The supermarket will also pull out of supply deals with WH Smith, Dobbies garden centres and EG Group.
It marks a major strategy shift for Sainsbury’s, which has long harboured ambitions to become a force in wholesale.
The Big 4 grocer was the frontrunner to buy Nisa in 2017, before pulling out over concerns that a deal might be blocked by the competition watchdog.
It claims the move will “put food back at the heart of Sainsbury’s”, having seen food sales growth slow to 0.8 per cent this quarter.
“To deliver our plan we must prioritise what we do,” a Sainsbury’s spokeswoman told The Grocer.
“We have just started talking to our retail partners and colleagues about what this means for the future of wholesale and it will be a gradual process.”
Sainsbury’s has said it will stock Simply Fresh stores for 12 months.
Transition periods for other partners will reportedly be considered on a “case by case basis”.
Booker, Tesco’s wholesale business, recently increased sales by 9.2 per cent as pubs and restaurants reopened.
It is possible that Sainsbury’s supply venture has proved less successful because it is geared more towards retail than hospitality.
The news comes after Morrisons axed “ad hoc” wholesale deals with independent shops, after struggling to source lorry drivers.
It has not cancelled any formal contracts with clients, including convenience giant McColl’s.
