Supermarket real estate has been a hot topic over the past 12 months as the cost-of-living crisis has seen grocery businesses across the UK reassessing their property strategy.
With some focusing on expanding their presence across growth sectors (we’re looking at you, convenience) and others cutting back on plans to open new stores, supermarkets keeping a careful eye on profit margins are all looking to finetune their existing footprint.
Boosting its existing property portfolio with a multi-million pound expansion plan is crucial to Aldi’s growth plans as it invests in developing both new and current stores to reach to a wider range of consumers.
At the same time, supermarket giants Tesco, Sainsbury’s and Asda are all looking to strengthen their convenience offerings.
However, while many are stepping up their property game this year in a bid to dominate the market, others are drawing back, contracting their plans as a result of a tough trading year.
We round up the UK’s leading grocery retailers property plans for 2023.
Sainsbury’s plans to open 20 convenience stores this year
While Sainsbury’s added a new supermarket to its portfolio last month (located in Desborough Harborough Road, Northamptonshire), its biggest focus for the coming year is its convenience expansion.
Since the start of 2023, the Big 4 grocer has opened Local stores in Hanwell, Shepherds Bush, Waterloo Station, Bramhall, Cambridge and Leeds, as its convenience stores hit a milestone, having achieved sales of £3 billion for the first time.
As a result, Sainsbury’s is now focusing on growing its convenience business, which currently comprises over 800 stores across the UK.
Over the past year, the supermarket giant opened 12 convenience stores and has plans to open over 20 more in the next 12 months.
Asda to open 300 convenience stores by 2026
As part of its plans to rapidly grow into the convenience market, Asda has unveiled plans to create 10,000 new convenience store jobs over the next four years as it accelerates the rollout of its new Asda Express store concept.
In December, the Big 4 grocer rolled out its second convenience store and has confirmed it plans to open 300 more by the end of 2026.
Asda also recently completed a £600 million deal to buy Co-op’s petrol forecourt business in October 2022. As a result, it will own an additional 129 convenience stores of between 1,500 and 3,000sq ft, with attached petrol stations and three development sites.
The 100th On The Move store opened last month, in partnership with EG Group, marking a significant milestone for both companies. The current plan is to open a further 100 sites across the UK this year.
Tesco continues to expand its convenience offering
Tesco, the UK’s largest retailer, opened its first checkout-free GetGo store in 2021 and expanded this offer in February to its first site outside of London at Aston University in Birmingham.
In the same month, Tesco officially opened its 2,000th Express store at the Lion Yard shopping centre in Cambridge, which also created 20 new jobs.
The Big 4 grocer’s convenience format, which is designed to bring value to more customers in more locations, has grown to the point where 77% of the UK population now live within 10 minutes of an Express store.
While Tesco has not yet unveiled its full expansion plans for 2023, convenience managing director, Kevin Tindell said that this opening came as a milestone for the retailer as it “continues to expand” its store network to give it “unrivalled proximity to customers looking for an easy and convenient shopping experience”.
Aldi aiming for 1,200 UK stores
In February, discount grocer Aldi revealed its multi-million pound expansion plan in London, having pledged to almost double its 60-strong estate within the M25.
Set to invest over £400 million, this will also include new and refurbished sites outside of London, across the UK.
Aldi currently has more than 990 stores and will open its 1,000th store later this year as it looks to meet its current target of 1,200 sites.
It is currently on the lookout for freehold town-centre or edge-of-town sites that are around 1.5 acres and can accommodate a 20,000sq foot store with around 100 parking spaces.
Lidl halves opening plans for 2023
In February, Lidl said that it would be scaling back its planned store openings for 2023, to instead focus on growing its warehouse capacity.
Typically, the discount grocer averages around 50 new store openings a year, with 54 opened in 2022 as it looks to hit a target of having 1,000 sites by the end of 2025.
However, this year, Lidl plans to open just 25.
Central Co-op to open 17 more stores
In January, Central Co-op unveiled its plans to close three distribution centres to join the LIDIA network from 2024, which is a national collective distribution and logistics operation owned and operated by Co-op Group on behalf of its own stores and independent Co-operative stores in the UK.
However, as it prepares for the move, the retailer is looking to open 17 new UK stores this year, while it usually aims for just 10 to 15.
It is also set to launch in north Yorkshire for the first time in 2023.
Waitrose to focus on small store openings as it revamps estate
In February, CEO James Bailey said that while Waitrose isn’t necessarily in need of more large stores, it is “going to put the pedal down” on its convenience estate.
However, he added that in the current financial climate, the upmarket retailer has to “think carefully about where we spend and not take too many risks, as a result of “inflation” and its focus on “the medium-term.”
Earlier this month, Waitrose also unveiled plans to launch a major £250 million revamp of 332 UK stores to win back more shoppers.
M&S focusing on food with 30 new stores
As part of a £480 million investment in its bricks and mortar store estate, M&S is set to open 30 new stores and 12 new food halls across the UK, which in turn will create over 3,400 new jobs.
The “bigger, better” stores will be opening over the next financial year as the high street giant looks to create a “seamless experience” for its customers.
The food halls will be based in community locations, including a 16k sq ft store in Stockport opening in summer, a 12k sq ft store in Barnsley opening in autumn and a 9,000 sq ft store in Largs in winter 2023.
Iceland closing existing stores
Frozen food retailer Iceland currently has more than 500 branches and 153 Food Warehouse sites across the UK, however is set to permanently close at least six stores.
The first was shut down on 25 February, with more to come this month.
While Iceland has not given reasons for why it is closing the shops, it has been battling rising energy costs in recent months.
Morrisons selling sites to raise cash
Morrisons revealed plans to sell-off some of its supermarkets in an effort to raise cash at the back end of last year.
The grocer‘s owner CD&R is seeking to sell and lease back five Morrisons supermarkets for £150 million in what will be the first such deal to be sanctioned in its 123-year history.
Despite this, Morrisons has not yet unveiled any major expansion or contraction plans for 2023, and opened a new supermarket in Chelmsford last month, creating 124 new jobs.
