Sainsbury's snaps up Jacksons convenience store chain

J Sainsbury continued its push into the convenience store sector yesterday, with the purchase of Jacksons Stores for an estimated £75m.

J Sainsbury continued its push into the convenience store sector yesterday, with the purchase of Jacksons Stores for an estimated £75m.

The struggling supermarket group is following the lead set by Tesco in a desperate attempt to narrow the yawning market share gap that has opened up between it and the market leader.

The deal comes just six months after Sainsbury's acquired the Durham-based Bells chain of convenience stores. It is buying 114 stores across Yorkshire and the North Midlands from Wm Jackson & Sons, the Yorkshire pudding maker to frozen food supplier that is controlled by the Oughtred family.

The move by Sainsbury's prompted an outcry from rival independent retailers, who are concerned that groups such as Sainsbury's will be able to undercut corner shops and put them out of business. David Rae, who heads the Association of Convenience Stores, a trade body, said he would press the Office of Fair Trading for an "urgent meeting" to call for a fairer grocery market. "The multiples are moving unfettered into the convenience stores sector. The DTI has to wake up and see what's happening," he said. Mr Rae wants the Government to view the grocery industry as one market, rather than distinguishing between "one-stop" and "top-up" shopping.

The Jacksons acquisition will double the supermarket group's share of the booming £23bn-a-year convenience store market to about 2 per cent. It still lags behind Tesco, which controls 6 per cent following its acquisition of T&S Stores two years ago. Justin King, Sainsbury's chief executive, said the deal would help the group get "real scale and expertise" in the sector. He expects it to enhance earnings in its first full year.

Although the deal will bring a handsome windfall for the Oughtred family, who are worth about £70m, Angus Oughtred, Jacksons' managing director, is staying on to run the chain. So too will the chain's 2,350 employees.

The supermarket group intends to rebrand the Hull-based chain "Sainsbury's at Jacksons". The stores will operate as a separate business under Jim McCarthy, the former T&S director. Jacksons had sales of £143m in the year to 24 April and net assets of £25.5m.