SAINSBURY LAUNCHING CENTER-CITY FORMAT

JAMES FALLON

LONDON (FNS) -- J. Sainsbury is launching a new format for center-city sites called Sainsbury Central.

Sainsbury, Britain's largest food retailer, plans to convert stores in Chelmsford, Exeter and Epsom into the new Sainsbury Central format. The three stores range in size from 12,700 to 18,000 square feet, a spokeswoman said.

The retailer has been developing the format for some time and will know quickly whether it can be successfully rolled out in other locations, executives said.

About 150 of Sainsbury's 340 stores are near the center of a city, the spokeswoman said. Of these, 98 are between 15,000 and 25,000 square feet and 51 are less than 15,000 square feet. The new Sainsbury Central format follows Tesco's launch two years ago of its Metro center-city format, which now numbers five stores. Tesco, the second-largest U.K. food retailer, recently said it planned to open four more Metro stores over the next year.

Safeway, the United Kingdom's third-largest food retailer, also has a center-city format called City, which it launched in 1989. The new Sainsbury format will have a three-in-one design to cater to different types of customers. One department will stock confectionery, sandwiches, snacks and newspapers for those consumers who want to be served quickly. A second section is for the customer who wants to "top up" their weekly shopping and the final area is for those who want to continue to do their main food shopping at a center-city location.

While the product range will be smaller than at Sainsbury's larger stores, the Central format will include a fresh meat counter for individual cuts, hot foods, counter-service deli and fresh bread.

David Quarmby, Sainsbury's joint managing director, said the range of products in the Central stores will be similar to the typical Sainsbury's superstore, with about 55% private label and the remainder national-brand items.

"We already have the products to cater to that market, but we have not been organizing them in the correct way to do so," Quarmby said.

Quarmby said the Central format is being tested in stores that up until a few years ago Sainsbury would have closed in favor of opening larger superstores. The group now realizes center-city locations offer a huge opportunity to increase sales, he said.

The launch of the Central stores is the latest example of the changing U.K. food retail market. The larger chains concentrated on opening out-of-town superstores of more than 25,000 square feet in the 1980s, but recent competitive pressures and tighter zoning rules have forced them to scale back on these development plans.