Even though the method chosen by which to do it has prompted some criticism from the City, Sainsbury’s £445m fundraising plans unveiled this week were a big statement of intent by the UK’s third biggest grocer. But do its plans make sense?

The money is earmarked for the expansion of the Sainsbury’s estate in three main ways. The first is to take advantage of the weak property market to buy more sites, particularly in those areas of the country where it is poorly represented. That makes a lot of sense because Sainsbury’s still hasn’t made up the ground it lost by pretty much halting site acquisitions in the 1990s, allowing Tesco to build up its formidable landbank, although it is worth pointing out that Sainsbury’s has said this regularly over the past few years without a real step change in the acquisition programme.

The second is to extend many of its stores. Again, very logical, given that Sainsbury’s has identified non-food as a major growth area but many of its stores aren’t big enough to really show off the full range.

It’s the third objective that I have difficulty with, which is the opening of 150 convenience stores over the next two years. That’s a lot of stores and I’m struggling to see where the huge gaps are in convenience retail provision are.

I saw Dido Harding, Sainsbury’s highly regarded head of convenience, speak very eloquently at the BRC conference last week. She mentioned a former Woolworths store in West Norwood, south London, which is near where I live.

In the space of a year, West Norwood’s grotty high street has gone from being served just by a Somerfield and an Iceland store to have a Tesco Express and a Sainsbury’s Local too. All are within 50 metres of each other and it’s simply more convenience retail than that street could possibly need.

While there are no shortage of high street properties available for the supermarkets right now, there’s a danger they might get carried away with the potential for further growth of a type of store that doesn’t offer the type of economies of scale that big out-of-town supermarkets do.

Most high streets are pretty well covered with convenience stores – both M&S and, interestingly, Sainsbury’s itself have undertaken pretty big disposal programmes over the past couple of years – so they need to be careful not to be dazzled by the property opportunities available.

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