SavaCentre
SavaCentre was a chain of 13 hypermarkets and later a further seven discount supermarkets owned and operated jointly by Sainsbury's and BHS, beginning in 1977. Sainsbury's later took full control of the stores alone in 1989, rebranding them as Sainsbury's SavaCentre, until 2005 when the stores were integrated into the Sainsbury's supermarket brand. The hypermarket stores ranged in size from to and the discount supermarkets ranged in size from to. At the time of its inception, it was the only dedicated hypermarket chain in the UK.
History
The initial idea
In the 1970s, the then chairman and chief executive of Sainsbury's, John Davan Sainsbury, realised the threat from the emergence of hypermarkets, such as those being built by the French retailer Carrefour. The initial response by Sainsbury's was a 50:50 joint enterprise with British Home Stores, set up on 9 December 1975 as Sabre Hypermarkets Limited, which was changed to Savacentre Limited on 31 December 1976.These stores carried the complete range of Sainsbury's and British Home Stores products along with electrical goods like refrigerators, washing machines, audio and TV equipment. Typical counters included delicatessen and fresh fish counters, an in-store bakery, a restaurant and half the stores' sales areas were devoted to textiles, electrical goods and hardware. The stores also featured a petrol filling station and some stores had over 1,000 car parking spaces. Following Sainsbury's launch of its home improvements venture, Homebase, in 1981, home and gardening products featured in SavaCentre stores. Following the 1986 merger between Habitat, Mothercare and British Home Stores to create Storehouse plc, baby care products were also sold in SavaCentre stores.
The first stores open
The first SavaCentre opened at The Galleries, Washington, Tyne and Wear, on 15 November 1977, with of sales area, and the slogan "The store with more for less.". This store was extended by a further to in 1986. On 17 October 1978, the second SavaCentre opened at the Hempstead Valley Shopping Centre in Kent. At the opposite end of the Hempstead Valley Shopping Centre a Presto opened, which later became a Safeway store. Following Sainsbury's buyout of Storehouse plc's 50% stake in SavaCentre in 1989, the British Home Stores branch was located in the former Safeway store, following Safeway's 2004 acquisition by Morrisons.File:Sainsbury's Hypermarket Calcot - geograph.org.uk - 3407.jpg|thumb|right|SavaCentre Hypermarket in Calcot, Reading
The number of SavaCentres grew slowly during the 1980s. In March 1980, the third SavaCentre opened adjacent to the Eastgate Shopping Centre in Basildon with of sales area, but this store was sold to Asda in 2004. In October 1980, a fourth SavaCentre opened in Oldbury, West Midlands. In September 1981, the Calcot SavaCentre, opened in Reading, and this store was used in the SavaCentre TV adverts in 1983. The Calcot SavaCentre was further extended by in the 1990/91 financial year, but when the store was rebranded as Sainsbury's in 2005, the extension was sold off to Next.
In 1984, SavaCentre started trading in Scotland following the opening of a store in Cameron Toll, Edinburgh. At the time of building the Cameron Toll SavaCentre was Scotland's largest single level store. This store also had to compete with a smaller Safeway supermarket in the same shopping centre, until the Safeway branch closed down in 1997.
The store in Colliers Wood, London, Merton SavaCentre opened on 28 February 1989 with of sales area, making it the largest hypermarket in the UK at the time of its opening. This store was later split up, with Sainsbury's taking of the sales area in 2005. The remainder of the space was taken by Marks & Spencer in 2008, with the store exterior featuring branding of both companies. Due to having two major shops this branch is often still known as the London Savacentre. As well as Sainsbury's and M&S, it hosts an Argos store and a Sainsbury's Fresh Kitchen.
Becoming a wholly owned subsidiary of Sainsbury's
In March 1989, Sainsbury's bought out Storehouse plc's 50% share in the partnership for £123 million and SavaCentre became a wholly owned subsidiary on 13 March 1989, in the last week of the financial year; the chain was rebranded "Sainsbury's SavaCentre". Sainsbury's initially negotiated a long-term contract with Storehouse to continue to supply SavaCentre with clothing, domestic textiles, lighting and other non-food lines, although these products were gradually phased out following the launch of Sainsbury's 'Lifestyle' range of own brand clothes in 1991. This was rebranded as 'I-N-I-T-I-A-L-S' in September 1996. The Sainsbury's own-label clothing range is now branded 'Tu'. At the time Sainsbury's believed there was scope for significant expansion. The deal also allowed Sainsbury's to integrate the company more fully with its existing food retailing chain, whilst retaining a separate management structure.Further expansion
SavaCentre, off Junction 22 of the M25 motorway in Hertfordshire, opened on 13 March 1990 with of sales area, and at the time of its opening it also became the largest hypermarket in the UK. The London Colney hypermarket was so large that two-thirds of the sales space was devoted to non-food. This store was later split up, with Sainsbury's taking of the sales area. The balance was sold off to Marks & Spencer, and the store was then rebranded as "Sainsbury's M&S" in 2005.Cheadle SavaCentre opened in 1990 with the BHS store opening towards the car park. BHS Cheadle closed in 1994, following John Lewis' taking over BHS in the next year after closure of BHS.
The SavaCentre in Meadowhall Shopping Centre, Sheffield, opened in September 1990 with of sales area. This store was originally rebranded as a Sainsbury's in 1999, but was closed and relocated to Crystal Peaks in 2006.
It was not until October 1993 that the tenth SavaCentre opened at Beckton in East London. This store became the smallest SavaCentre, with a sales area of. At the same time, a new concept store, with of sales area, was opened adjacent to the SavaCentre. This store was based on a club warehouse type format, and was branded as "Bulksava". This format was not a success and the Bulksava branch closed down a year later.
In August 1995, the London Sydenham SavaCentre opened with a sales area of. Also in 1995, the Stockton-on-Tees SavaCentre opened, with of sales area, which was a former North Eastern Co-op store, and was later sold to Tesco in 2003. In 1997 a SavaCentre opened in the White Rose Centre, off the M62 motorway, in Morley, West Yorkshire, in Leeds, with of sales area. When this store was rebranded as Sainsbury's in 2005, the sales area was cut to.
A fourteenth SavaCentre hypermarket planned for Braehead in Renfrew, Scotland, was also due to open in 1997. This store opened in 1999 before moving to a larger in the same complex in 2009.
A fifteenth SavaCentre hypermarket was planned for Romford, East London, but this store also only eventually opened as a large Sainsbury's.
1990s store formats strategy
During the 1990s, Sainsbury's continued to build around 20 new freehold supermarkets of around a year. Sainsbury's argued that customers would rather experience a full grocery offer which was not compromised by non-food. With stores of SavaCentre size, not only could the full range of Sainsbury's grocery products be sold, but a further sales area of equivalent size could be devoted to non-food. SavaCentre was still only a small part of the group, and did not make a significant contribution to the Group in comparison to Sainsbury's Supermarkets.This came at a time when arch-rival Tesco was not only matching the Sainsbury's store portfolio, but also exceeding them in terms of store size. Tesco mimicked the Sainsbury's SavaCentre format, and launched its own Tesco Extra version only as recently as 1997, which was 20 years later than Sainsbury's. Tesco pursued an aggressive expansion of its hypermarket format, converting existing stores through extensions, and paying high prices for larger pieces of land to build new ones. Although Tesco Extras or ASDA Supercentres now dominate the hypermarket format, it was Sainsbury's who pioneered the modern hypermarket.
Launching a strategic review of SavaCentre
On 2 August 1997, Sainsbury's decided to launch a strategic review of its SavaCentre hypermarket format with the help of Coopers and Lybrand. The review concluded that to offer both the full Sainsbury's food offer and a comprehensive non-food offer, stores would have to have sales areas of at least. Obtaining planning permission for stores of these sizes in out-of-town locations was difficult, and there was also stiff competition from specialist non-food retailers at the time.It was therefore decided that the traditional SavaCentre hypermarket format would be scrapped, and the existing SavaCentre stores would be remodelled to look like a very large Sainsbury's Supermarket, concentrating on fresh foods and home meal replacements. Under the new format, DIY and gardening products, lighting, TVs and vacuum cleaners were to be removed. It was also decided that the SavaCentre name would be re-branded as "Sainsbury's Savacentre", to emphasise that the company was now a wholly owned subsidiary of Sainsbury's.
In August 1998, the Calcot SavaCentre was the first to be remodelled to provide a greater emphasis on food, with the food to non-food ratio changing from 60:40 to 80:20. Non-food was based around four areas: Celebration – for party ideas; Indulgence – for beauty products; Baby and Toddler; and Cookshop. The refurbishment cost £26m. The store director from 1996 to 2002 was Chris Diplock. The chairman of Savacentre Ian Coull, MD Jack O'Brien and other board members all resigned.
The plan was to roll out the format, which was trialled at the Calcot SavaCentre, to the other 12 SavaCentres over the next three years. This format was not a success and the Calcot SavaCentre became the only hypermarket to be remodelled in this format. The Calcot SavaCentre was downsized and rebranded as Sainsbury's in 2005, but following a further refurbishment in 2008, a number of the products removed in the 1998 revamp were reintroduced.