Sainsbury buys US chain

Eurofood, Dec 3, 1998

Britain's number two food retailer Sainsbury has become the second-largest food store operator in New England with the acquisition of the Boston-based Star Markets group from the Investcorp investment group for US$489m (ECU698.6m). Sainsbury already operates in the north west United States via the Shaw's chain, and will convert Star Markets' 53 outlets to this fascia, bringing Shaw's closer to the regional leader Stop & Shop, owned by Ahold of the Netherlands.

Sainsbury's aim is to generate sales of US$10bn from its New England operations within five to seven years, and the integration of Star Markets with Shaw's will put it well on target with annual sales of US$4bn. The UK group is predicting savings of US$40m by the third year because of improvements in buying and distribution, among other synergies. Other acquisitions in the New England region are likely to follow, Sainsbury said.