Co-op sells 132 forecourt stores to Asda for £600m

Asda has acquired 132 forecourts from the Co-op Group in a £600m deal.

Due to complete in Q4 2022, the transaction includes 129 existing sites, each with a grocery retail store of between 1,500 and 3,000 square feet and attached petrol filling station, and three development sites.

Asda co-owner Mohsin Issa said this deal realises the group’s ambition to grow in the convenience sector. “We see convenience as a significant growth opportunity for the business,” he said. “This acquisition accelerates our strategy in this area and forms part of our long-term ambition to become the UK’s second largest supermarket.

“We have always been clear in our ambition to grow Asda and are hugely excited to create this new and distinct part of our business, giving us the opportunity to bring Asda value in fuel and groceries to even more customers and communities across the UK.”

The 132 sites represented 5% of the overall Co-op estate and the 2,300 colleagues currently employed in these Co-op stores will transfer to Asda’s employment under TUPE transfer following completion and after a transition period. The stores being acquired as part of the transaction delivered net sales of £863m and pro forma EBITDA of £53m for 12 months to June 2022.

According to the Co-op, the proceeds from the sale will be used to reinvest into its core convenience business centred around its retail estate, as well as its growing wholesale, franchise and e-commerce operations, including ”new convenience stores in the heart of more communities”. It will also be used to invest in Co-op’s pricing, store operations, technology, and logistics and reduce its net debt.

Chief executive at the Co-op Shirine Khoury-Haq said: “This transaction is in line with our strategy to move away from operating petrol forecourts and supports our vision of Co-operating for a fairer world while building our core leading convenience business. I would like to thank our incredible colleagues in these stores, and we will work closely with Asda to ensure a smooth transition.”