Ulster reaps dividend with Sainsbury move

The ceasefire in Northern Ireland yielded a significant retail dividend yesterday when Sainsbury announced plans to build seven superstores in the province at a cost of pounds 100m. The stores will create more than 2,000 jobs.

Sainsbury's has lodged planning applications for sites at Londonderry and Sprucefield as well as two others in south Belfast where it is believed to have paid pounds 32m for a single site. The grocer is in talks about sites in Tillysburn and Ballymena and another in the south of the province. Other openings are expected with the first store due to open in August 1996.

Sainsbury's chairman David Sainsbury said: "This is an historic moment for Sainsbury's. Our plans for Northern Ireland represent a major initiative for our core supermarket business."

Though Sainsburys claims it would have gone ahead even without the ceasefire, the peace process has clearly accelerated its plans. "Obviously the cease- fire has enhanced opportunities there but we feel that Northern Ireland has been under-represented by retailers for some time," Sainsbury's says.

Northern Ireland represents a potentially lucrative market for the United Kingdom supermarket groups which are faced with saturation in the home market and more restrictive planning regulations on out-of-town stores.

Food prices are up to10 per cent higher than the UK average and Marks & Spencer is seen as relatively cheap. Labour costs are proportionately lower, as is the ratio of shopping space per head of population.

Neil Currie, food retail analyst at SG Warburg, says: "In many ways the Northern Ireland market is like the mainland was a few years ago. There are a lot of independents and the Co-op with only a couple of big players such as Wellworths and Stewarts. It is a sensible move for Sainsbury's.

The announcement could be the first of a flurry of similar moves as the UK's largest retail groups move to take advantage of an opportunity on their doorstep. Tesco is thought to be looking at sites in Ulster and Asda has also expressed interest.

Carpetright, the carpet warehouse group, has opened three Ulster stores in the last six months and is planning a chain of 10. Marks & Spencer has operated successfully in Northern Ireland for 25 years and its food hall in its Lisburn store is the largest in the group. It has four stores there and a fifth will open in Londonderry in the Autumn.

Boots has 33 branches in Ulster and its store in Belfast is one of the top three performing branches in the group. Kingfisher has 13 branches of Woolworth's as well as branches of B&Q and Superdrug. Sears has 85 Ulster stores.