Sainsbury to cut down on out-of-town store openings

THE BACKLASH against out-of-town shopping gained momentum yesterday after the Government eased restrictions on town centre parking and Sainsbury said it planned to curtail new superstore openings and spend more on remodelling its older sites.

David Sainsbury, chairman of J Sainsbury, told the annual meeting that a recent tightening of planning regulations would make it difficult for the chain to achieve its target of 60 new store openings over the next three years.

He said an increasing proportion of supermarket investment would go into improving older town centre sites.

A new supermarket format, to be called Sainsbury's Central, would be launched. Its rival Tesco recently said it was expanding its own town centre Metro chain.

Confirming the sea-change in government development policy, David Curry, local government and planning minister, told a Commons environment select committee that Blue Water Park, soon to be developed as Britain's biggest shopping centre, would not gain approval if it was submitted now.

He said that it was essential that adequate provision was made for short stay parking in city centres, especially for food shopping. Department policy was now to restrict cars rather than ban them altogether.

Mr Sainsbury told the annual meeting that his company was committed to retailing in town centres where 149 of its 341 supermarkets were located.

But he said most of Sainsbury's customers wanted to shop in large supermarkets with single-level parking.

'They do not like multi-storey car parks and they don't want to carry large amounts of shopping on public transport,' he said.

Mr Sainsbury said confusion over recent guidance from John Gummer, Secretary of State for the Environment, was causing difficulties in the planning system, which in turn had delayed investment decisions.

Last year Mr Gummer issued two planning guidance notes - PPG6 and PPG13 - which suggested that the Government would look harshly on applications for out-of-town shopping centres if it appeared that they adversely affected the vitality and viability of town centres.

Mr Sainsbury told shareholders that sales in the Sainsbury supermarket business had risen by 7.1 per cent in the first 12 weeks of the financial year.

However, like-for-like sales volume in stores had increased by 0.5 per cent while grocery prices had continued to fall.

Sainsbury's shares closed 6p down at 396p in the wake of the chairman's statement on future expansion and current trading, causing Tesco shares to fall 4.5p to 216p in sympathy.

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