Justin King, the charismatic chief executive of Sainsbury’s, has fought a series of bitter battles with his rivals during his decade at the top of one of the country’s biggest supermarket chains. But his determination to squeeze out the competition has had a ruinous effect in an unlikely place – his home town.
Land-grabbing – or the “space race” as supermarkets prefer to call it – saw big chunks of Britain’s high streets snapped up before the recession hit. Many of those sites remained derelict through the downturn as the retailers re-assessed their building plans.
The most sensitive of all for Mr King is a site in Dorridge, just outside Birmingham, where he was raised and still owns a house nearby. Five years ago Sainsbury’s spent £10m buying up a sizeable portion of Dorridge – but now the shops are all boarded up.
Ian Spencer, chairman of the Dorridge residents’ association explains: “Sainsbury’s bought 50 per cent of the shopping sites in the town in 2008, at the height of the boom. But when the recession hit they had to reassess their options.”
Two years later, in 2010, Sainsbury’s submitted an application for a large store but it was rejected, with councillors on the planning committee convinced it was too big for such a small town. Residents were angry that they had not been consulted and encouraged the company to listen to their concerns.
The following year a new, smaller proposal was put forward following a series of town hall meetings. This was approved – but then Mr King and his team decided it was not economically viable. He wrote at the time: “The continuing uncertainty means that I’m sorry to have to tell you that our store in Dorridge has not been included in our development plans for the year ahead.”
The community reacted with anger. Mr Spencer says: “The bosses in London got a spreadsheet of possible projects that they felt would have the best return. Dorridge wasn’t in their top bracket – but that’s a very corporate view to take. They clearly didn’t think about the impact on the community. We told them they had screwed up the centre of the whole village.”
Dorridge’s Conservative MP Caroline Spelman says: “It was not looking pretty at the shopping centre with all the hoardings up. But I met with Justin King, who explained to me that the hoardings were just temporary and that they did intend to start work.
“They could have been a bit clearer over the timeline of the project and explained each process, but they have now said work will start soon and appear to have the interests of the town at heart.”
Five years on, Sainsbury’s insists that work will start by the end of the year – although it has only appointed contractors in last few days – and no doubt Mr King will be the first through the doors when the store opens in 2014.
Mr Spencer is still not convinced. “We’ve been waiting so long now that for most of the town it is a case of we’ll believe it when we see it,” he says.
Local blogs have reported every minute movement with the project, with residents keen to see their town centre restored from a derelict wasteland to a shopping precinct – even if it is dominated by a Sainsbury’s.
And Dorridge is not an isolated case. Residents in Linwood, Scotland, have been waiting several years for Tesco to build them a supermarket, after the company bought up much of the town centre. But they feared the worst when last month Tesco announced its first profit fall in 20 years.
Even now the site remains empty, although Tesco claims it is still committed to building – at some point in the future. This despite chief executive Philip Clarke calling an end to the space race when he recently wrote down £804m on Tesco’s UK property portfolio.
Sainsbury’s rejects the suggestion that it has been involved in land grabbing and blamed the planning laws for the delays in Dorridge.
A spokesman added: “Work on our fantastic new Dorridge store will begin shortly and we expect to open next autumn. The process has taken longer than we would have liked but we’re looking forward to offering a range of products currently unavailable in the town.”
The residents, who have been well aware of the lack of products for years, are waiting with anticipation.
* This article has been corrected to make clear that Sainsbury’s Justin King does not have a house in Dorridge itself; it is 20 miles away. An erroneous reference to his aunt living in the town has been removed. Contractors for Sainsbury’s new store have recently been appointed – the report originally said no appointment had yet been made. Updated 28 November 2013