LANDOVER, Md. (FNS) -- J. Sainsbury, the U.K.'s leading supermarket operator, is planning to increase its stake in Giant Food here and is also making plans to accelerate the chain's expansion.
Those objectives were disclosed in statements made in London by David Sainsbury, chairman, and by other Sainsbury executives.
Sainsbury late last year agreed to acquire 50% of the voting common stock and 16% of the nonvoting equity in the 159-store Giant chain. Sainsbury is acquiring the Giant stake from the family of Samuel Lehrman, Giant's late co-founder, for $325 million in cash and borrowings.
The remaining 50% of the voting stock is controlled by Israel Cohen, Giant's chairman and chief executive officer. Cohen controls four board seats, Sainsbury three. At the time of those developments, a Sainsbury spokesman said no further increases in stock holdings were contemplated. More recently, in London, David Sainsbury said he would like to increase the holdings in Giant if given a chance.
No further details about Sainsbury's investment strategy were disclosed, although Sainsbury executives mentioned they did not see the process taking as long as it took for Sainsbury to gain full control of Shaw's Supermarkets, East Bridgewater, Mass. In that instance, Sainsbury bought its initial stake in Shaw's in October 1983, but did not take full ownership until four years later.
Meanwhile, plans at Sainsbury call for the British retailer to take a bigger role in fostering growth in its two U.S. operations -- Shaw's and later Giant -- because its own expansion efforts in the United Kingdom are meeting roadblocks. British planning authorities are increasingly resisting large, suburban stores, causing Sainsbury to trim store-opening plans for the United Kingdom.
"There will be a buildup of Shaw's commensurate with the slowdown in the U.K.," said Iain Coull, Sainsbury's development director. Giant appears to have significant room for expansion into Pennsylvania, where it recently moved into the Philadelphia area, and New Jersey. But Shaw's faces more difficult choices because it is already well placed in the Maine and New Hampshire markets.
There is some potential for some fill-in units in Rhode Island and more for moving into western Massachusetts and the remainder of Connecticut.