Rivals eye cornershop chain

British supermarket rivals Tesco and Sainsbury’s are circling cornershop chain Conveco in the latest round of consolidation in the convenience market, it was reported today.

The food retailing giants are understood to have held talks with Conveco managers on buying the 65-chain of stores for around £25m (€37.3m)..

Somerfield and Co-op Group are also thought to have expressed an interest in the Bristol-based company, the Sunday Express reported.

Conveco employs more than 900 staff and operates stores in Cornwall, Devon, Avon and Somerset, including sites in Plymouth, Bristol and Exeter.

It was bought by its management team from Alldays in 2001 using financial support from Aberdeen Murray Johnstone Private Equity. Plans at the time were to grow the business to more than 100 stores by 2006.

Sainsbury’s declined to respond to the report, saying it did not comment on speculation, while Tesco could not be reached for reaction.

Interest among supermarkets in the convenience store sector has grown in the last year as chains struggle to gain permission for larger outlets.

The market is viewed as a major growth area and is currently thought to be worth around £21.5bn (€32.1bn) a year.

Tesco led the charge by buying Adminstore, which operates Europa, Harts and Cullens outlets in the London area, in January for £53.7m (€80.2m).

The following month, Sainsbury’s bought the 54-strong chain of Bells Stores in the north east of England for around £22m (€32.8m).

Sainsbury’s is also a front-runner in the lengthy sale process of TM Group, the owner of the Martins and Forbuoys newsagents. Analysts expect a bid of around £130m (€194m) for the chain of 1,200 stores to be successful.

And this week Somerfield paid an undisclosed sum for Scottish retailer Aberness, which operates 36 convenience stores and supplies products to another 130 outlets.