Sainsbury's in talks over China store openings

Senior executives at supermarket Sainsbury’s met with government officials in China to discuss opening the group’s first overseas stores for almost a decade, it emerged today.

A six-man team was dispatched to the country last month to assess whether Sainsbury’s should open a chain of Chinese stores, the Sunday Telegraph said.

The paper said senior Sainsbury executives also met officials from China’s Ministry of Commerce when they visited London this week.

The UK’s third biggest grocer said it could not give specific details of where Sainsbury’s was considering expansion.

Sainsbury’s announced in June that Darren Shapland, Sainsbury’s group development director, was asked to study the possibility of overseas expansion as part of his new role.

If Sainsbury’s goes ahead with store openings in China, it will be running head-to-head with rival Tesco, which has plans to open 80 giant 400,000 sq ft Lifestyle malls in China.

Supermarket giants Carrefour, from France, and Walmart, from the US, have both spent nearly a decade building Chinese business.

A move overseas would mark a radical departure for Sainsbury’s. In 2004, it pulled out of the US with the sale of Shaw’s, its US supermarket business.

Sainsbury’s posted an easing in sales in its last interim update in June, with like-for-like sales excluding petrol slipping to 1.1% in the 12 weeks to June 12.

The supermarket has identified non-food sales and smaller convenience-style stores as key areas of growth.

It remains on track to open 1.45 million square feet in new space during the current financial year as competition for hard-pressed shoppers intensifies.