Irish peace fosters an outbreak of store wars

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Britain's leading supermarket groups are targeting Northern Ireland for new store openings, with some expected to sign deals on sites in the next few weeks. With a market boosted by the peace process, Ulster is seen as a good growth opportunity, as the planning environment for out- of town stores in England has become more restrictive.

Sainsbury is believed to be looking for up to six sites for superstores and is close to signing a deal in Belfast. Tesco is also interested, while Safeway and Asda say they too are looking.

An Asda spokesman said: "We've been looking at Northern Ireland for a little while now. It's a market that's opening up and recent developments there can only help that along." The company also said it had been approached be several property developers about sites there.

Though it would not comment on its Ulster plans, Sainsbury would be the most likely to expand there, as it already owns a stake in Hampdens, a quoted Northern Irish group which runs the Texas Homecare and Kwik-Fit outlets in Northern Ireland. Sainsbury acquired a 29 per cent stake in the group when it bought the Texas chain from Ladbroke earlier this year.

A City analyst said: "Northern Ireland is not going to take 10 stores from each of the majors but it is a strong market."

Several UK retailers are already enjoying considerable success in Northern Ireland. Marks & Spencer has operated successfully there for 25 years. If has four stores and will add a fifth in Londonderry in autumn. Its edge-of-town store in Lisburn has the largest food section in the group. "We're definitely looking at other opportunities in Northern Ireland," M&S says. "Belfast has always been an important store to us even before the peace process. That can only improve now." Carpetright, the carpet warehouse chain run by Sir Phil Harris, has opened three stores in Northern Ireland in the past six months and is looking for up to 10 outlets.

It is not just the peace dividend which makes Northern Ireland look attractive. According to the retail consultants Verdict Research, the ratio of retailing space per head of population is lower than in England. "There is great potential," Verdict's analyst Hilary Monk said.

Robert Clarke of the retail analysts Corporate Intelligence said the expansion of the supermarket groups would be a logical step. Competition would include Stewarts, which is part of Associated British Foods, and Welworths, which is now part of the Fitzwilton chain but used to be owned by Isosceles.

The ceasefire is also paying dividends in exports from local companies, Baroness Denton, the junior Northern Ireland minister, said in an interview on the eve of her departure for a mission to Italy with executives from 14 companies, including eight from the textile industry.

She said Northern Ireland exports to Italy rose 36 per cent last year to pounds 58m and she believed the strong performance would continue as peace opened doors in foreign markets. Buyers were overcoming their fears of visiting Northern Ireland and the Italian fashion industry was snapping up textiles from the province. One company, Ulster Carpets, had been trying to sell to an Italian firm for some time but its buyers refused to go to Northern Ireland to inspect the products while the troubles continued.

Baroness Denton said: "Ulster Carpets is living evidence of the way we are going since the ceasefire. Now their customers are willing to come over to see them, as a direct result of the ceasefire. People feel comfortable visiting the factories."