Q&A: Does Sainsbury’s Franchise in the UK?
As one of the biggest supermarket brands in the UK, Sainsbury’s is the go-to store for many consumers. Let’s find out whether Sainsbury’s franchise opportunities exist and how you can get involved in the booming business.
Sainsbury's is the UK’s second-largest supermarket chain, commanding 15.3 percent of the market share. It’s known for its wide range of products from all across the globe and is loved by many for its high-quality produce sold at affordable prices. Founded more than 150 years ago by J. Sainsbury, the brand has weathered many challenges over the decades, including the devastating 2008 recession that claimed many other British stalwarts. But is the famous British business a franchise and can you invest in it? Let’s find out…
History of Sainsbury’s
Sainsbury's was founded in 1869 by John James Sainsbury, who decided to set up a small shop on Drury Lane in London. It began as a small fresh foods store, before expanding its product range to sell items like tea and sugar – and it wasn’t long before the store increased in popularity.
To differentiate the outlets from competitor stores, large, cast iron ‘J. SAINSBURY’ signs were installed above each of them. Sainsbury’s also popularised the ‘round-the-back’ delivery method, so it didn’t upset its rivals as the brand grew. By the time John James Sainsbury died in 1928, he’d built an empire of more than 128 shops, which were passed down through the family. On his deathbed, the only message he is thought to have left was a note to tell his sons to keep the stores “well-lit”. Evidently, Sainsbury was dedicated to his business to the very end.
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Sainsburys was incorporated as a private limited company in 1922, when it achieved the status of the UK’s largest grocery retailer. But, in 1973, it was converted into a public limited company when it became the biggest company ever to be floated on the London Stock Exchange. More than a million shares were set aside for staff and applications for stocks closed within one minute, causing prices to skyrocket shortly after.
In early 2016, the supermarket company entered into a deal with Home Retail Group to acquire brands including Argos and Habitat for £1.4 billion. Now, many Sainsbury’s stores have concession areas for these brands, making it easier for shoppers to pick up all their goods and access a range of services while they do their shop. Many stores also have cafes, where people can grab a delicious bite to eat, from hearty breakfast options to tasty main meals.
Does Sainsbury’s franchise?
Sainsbury's toyed with the idea of franchising briefly in the late 2010s when it looked into expanding its network of small convenience stores across the UK. However, this plan hasn’t been put into action yet and, for now, Sainsbury's stores are all company owned.
How to get involved with Sainsbury’s
Although it’s not possible to become a Sainsbury’s franchise owner, you can still invest your capital in the brand. To learn more about the process, visit its dedicated investor webpage, which lists financial highlights from previous years, as well as shareholder information and other industry news.
Alternatively, you could work under the Sainsbury’s brand by becoming an employee. Browse its careers site to see which vacancies could suit you. There are openings with the supermarket store, as well as its associated brands, Argos, Habitat and Sainsbury’s Bank.
The supermarket sector in the UK
The supermarket sector has undergone significant changes in recent years. As consumers have turned away from ‘the big weekly shop’ and increasingly opt for daily ‘top-up’ shops, convenience store businesses have been able to take up a larger market share. But this is no cause for concern at Sainsbury’s, as its helpful ‘Local’ store model attracts a wide range of shoppers in high footfall locations.
According to IBISWorld, UK supermarkets generated a combined revenue of £181 billion in 2019. The sector is made up of 17,823 businesses, which employ over a million people across the country. By operating a network of ‘Local’ convenience stores and an online food delivery division, Sainsbury’s has been able to secure its spot in the increasingly busy supermarket sector. So, putting your money into the brand could be a lucrative investment option if you don’t want to become a franchisee.
Similar franchise opportunities
Most of the UK’s biggest supermarket brands do not operate a franchise model, and instead opt to manage their entire network of stores themselves. But, if you’re keen to run your own grocery store franchise, there are several options you might be interested in. Let’s take a look at two options.
This American convenience store started offering its franchise model in 1964, after purchasing a number of Speedee Mart franchises across California. 7-Eleven was ranked #1 on Entrepreneur magazine’s 2017 Top 500 rankings list, and was named one of Fast Company magazine’s ‘Top 10 Most Innovative Companies in Retail’ in the world. The company has also been ranked as one of the Military Times’ Best for Vets franchises.
- Becoming a 7-Eleven franchisee: 7-Eleven currently operates in more than 17 countries and welcomes applications from interested franchisees on its website. Although it doesn’t currently offer opportunities in the UK, you can set up your own 7-Eleven in another country if you’re interested in international territories. To find out more, click here.
- How much you need to invest: 7-Eleven hasn’t revealed how much it would cost to set up a new store, as the total could fall anywhere between $100,000 and $1 million, depending on location.
- What you get for your investment: The franchise model is unique in that it shares profits from across the group with its franchisees, as well as the royalties they make on sales, offering all franchisees multiple revenue streams within their business.
This subsidiary of Tesco operates more than 770 company-owned stores and 160 franchisee-owned stores across England, Wales and Scotland.
- Becoming a One Stop franchisee: Franchisees are not constrained to a specified list of supplies; as long as they purchase 95 percent of their stock from One Stop, they have the freedom to select their own local suppliers to make up the remaining five percent. To learn more, click here.
- How much you need to invest: One Stop is looking for established retailers who would like to convert their store into a One Stop franchise and are willing to pay up to £50,000 to make that happen.
- What you get for your investment: The chain will provide a store re-fit, refreshing the interior and exterior of the shop to reflect the One Stop brand in accordance with the existing store’s size, dimensions and features. Fill out the company’s online form to find out whether you fit the criteria and qualify for a free consultation.
Start a supermarket franchise
There are no Sainsbury’s franchise opportunities at the moment, but there is reason to suspect the brand might launch a franchise model in the future. So, it’s worth keeping an eye on it if you’re enthusiastic about becoming a Sainsbury’s franchisee.
You can find out more about the best grocery store franchises currently on the lookout for savvy investors in our article: Top 5 Convenience Store Franchises in the UK.
Alice Tuffery, Point Franchise ©
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