LONDON (FNS) -- J. Sainsbury here continues on the acquisition trail with a $71.1 million (45-million-pound) deal to buy three warehouse clubs from U.K. cash-and-carry operator Nurdin & Peacock.
permarket format. A site in Bristol will become a Sainsbury's superstore, and the third club, in Croydon, will be sold. The company plans to spend about $31.6 million (20 million pounds) on the new stores.
The sale marks Nurdin's withdrawal from the warehouse club market after launching its format only about a year ago. Nurdin said membership at its Cargo Clubs exceeded expectations but that sales were disappointing. The company tried to target consumers as much as small businesses, offering smaller pack sizes and spending more on marketing and promotion than its competitor, Price/Costco, which is 60% owned by Price/Costco in the United States, 20% by France's Carrefour and 20% by Littlewoods, United Kingdom. Analysts said the difficulties at Cargo Club are further proof that the standard warehouse club format cannot be tampered with because the stores operate on such finely balanced profit margins.
