Littlewoods plans to open warehouse club to subscribers

Click to follow
The Independent Online
LITTLEWOODS Organisation, Britain's biggest private company, announced plans to open a 'warehouse club' store by the end of the year, selling cut-price groceries and durables to subscription-paying members.

Customers, who will have to prove they are small businesses to qualify as members, will enjoy discounts of at least 10 per cent on about 2,500 lines picked from pallets in a huge warehouse-style store.

Littlewoods, which disclosed flat group profits and sharply worsening losses in its Index catalogue shops, has signed a joint venture with Price Club Canada, part of Price Co, America's second-biggest warehouse club operator.

If the first store - probably to be sited in the North-west - succeeds, the two sides will roll out the format. CostCo, a rival US group, and Nurdin & Peacock, the cash and carry firm, also have plans for British warehouse clubs.

In the US, warehouse club members typically spend dollars 1,500 a year. The annual fee is dollars 20-dollars 25. The stores are usually about 100,000 sq ft - three times the size of a typical Sainsbury superstore.

Losses at Index worsened to pounds 9.1m in 1992 from pounds 3.7m, bringing total losses since its 1987 launch to pounds 53.3m. Index, set up as a rival to Argos, has never made a profit, despite growing to a 127-store chain with annual sales of pounds 228m.

Littlewoods reported pre-tax profits of pounds 97m on sales of pounds 2.7bn. Profits in mail order were flat at pounds 56m on sales of pounds 974m. Littlewoods chain stores' contribution fell 8 per cent to pounds 28m on sales of pounds 696m. The football pools business improved from pounds 19.9m to pounds 21.6m on sales of pounds 780m.

The shareholders - the 34 members of the Moores family - intend the company to remain private, Littlewoods said.

View from City Road, page 32

Comments