UK: Speculation mounts as retailers "circle HMV sites"

UK grocery retailers are reportedly circling former HMV stores, which were put on the block after the music retailer went into administration last month.

HMV administrator Deloitte has confirmed that it is currently accepting bids for the group's 220 shop leases. The deadline for bids has been set for this Friday (5 February).

According to reports, the auction has attracted particular interest from the country's food retailers who are looking to boost their presence in town centre locations with small supermarkets and convenience stores.

Sainsbury's, Morrisons and Tesco have all been linked to the sale. Sainsbury's and Morrisons declined to comment on "market rumour and speculation", while Tesco was unavailable for comment.

The speculation comes as competition to expand in the convenience sector - one of the fastest growing channels in UK retail - continues to rise.

Morrisons, which currently operates 12 M-Local convenience outlets, has indicated that it aims to open 50 additional c-stores this year. Yesterday, the group confirmed that it has snapped up seven stores owned by failed camera retailer Jessops as it looks to push further into the country's convenience channel. Meanwhile, Sainsbury's is also targeting growth in the convenience space and last month the group reported a 17% increase in convenience sales during the third quarter. The company has indicated that it will add around 1m square foot of space to its estate this year, with some of this expansion fuelled by convenience store openings.

Iceland, the frozen food specialist, has also been tipped as a potential buyer for the HMV stores. A spokesperson for the retailer told just-food that the group aims to open around 40 new stores this year in "all sorts of locations". This is a "significant increase" on the firm's past space expansion rate, the spokesperson added. However, an industry source downplayed the likelihood of Iceland making a move for the HMV sites, suggesting that they were unlikely to appeal to the retailer.

Meanwhile, a spokesperson for Poundland confirmed the fixed price retailer's interest in the sale. "Poundland can confirm it is interested in a number of HMV stores and is exploring opportunities with the administrators of HMV," the spokesperson said.

Poundland has benefited from the economic downturn, as its appeal has risen among increasingly price-conscious consumers. The group has looked to build its grocery offering, develop its own label range and step-up the pace of store openings.

"Poundland is continually assessing new store opportunities and locations where it can introduce its amazing value offering to new customers," the spokesperson confirmed.