Co-op to open new stores in deal with departing billionaire Asda Issa brother
The Co-op is to open new stores in petrol stations across the country after signing a deal with one half of the billionaire Issa brothers.
The Manchester-headquartered group has penned a franchise agreement with EG On The Move which will initially see seven new Co-op stores open this summer in petrol stations.
EG On The Move recently announced plans to grow by over 120 sites in the next three years.
The Co-op also announced plans to increase its franchise stores to reach over 500 by 2030, across petrol forecourts, universities and convenience.
The move comes after the Co-op sold its petrol station business to Asda for £661m in 2023.
It also comes after one half of the billionaire Issa brothers sold his stake in Asda to the private equity giant the pair partnered with to secure its £6.5bn takeover in 2021.
Funds managed by TDR Capital agreed to acquire Zuber Issa’s shares in the Leeds-headquartered chain last month.
Mohsin Issa will remain a co-owner of Asda alongside TDR Capital. The move means that the private equity giant now has a stake of 67.5 per cent in the supermarket while Mohsin Issa will hold 22.5 per cent.
A further 10 per cent is held by former owner Walmart. The deal is expected to complete in the third quarter of 2024.
It was also announced that Blackburn-headquartered EG Group had agreed to sell its remaining UK forecourts business to Zuber Issa for £228m.
Jerome Saint-Marc, the Co-op’s managing director B2B and growth, said: “We are hugely excited to be working with EG On The Move on these new franchise sites and to be able to bring our Co-op franchise offer to more locations.
“This is part of our broader expansion in the petrol forecourt market. It follows our strategy to pivot our growth in this market through franchise, enabling us to share our convenience expertise with partners of pedigree.
“As part of the Co-op’s overall growth plans, growing our franchise stores is a key priority for us and we have ambitious and exciting plans to significantly increase our footprint and become the partner of choice across a range of sectors.
“We’ve got an excellent market proposition. And whilst it’s highly competitive, we believe there’s huge potential to unlock growth with our trusted brand, and unique offer and expertise.”
Co-op currently operates almost 2,400 food stores and provides products to over 6,000 other shops including those run by independent co-operative societies and through its wholesale business, Nisa.
Last month, City PM reported that Nisa Retail had seen its revenue tick up after its parent company partnered with Just Eat to offer home delivery.
The company, which supplies more than 4,000 convenience shops and small supermarketsin the UK, including Costcutter, increased its revenue to £1.42bn in the 12 months ended January 7, 2024, up from £1.38bn in the year before.
But despite an increase in revenue, the company took a hit to its pre-tax profit, which fell from £20m to £14.9m over the 12 months.
EG On The Move chief executive Zuber Issa said: “EG On The Move is an acknowledged petrol forecourt and convenience retail destination operator, and we are delighted to have the opportunity to collaborate with Co-op to roll out their new convenience store formats.
“Following on from this seven store trial, we look forward to working with Co-op to consider other locations across the network.
“Co-op is a well-established convenience operator, respected in the market and a recognised consumer brand, and this partnership not only promises to enhance our convenience store offer but it will also ensure our customers have access to exceptional fuel retail services including EV charging, a wide choice of essential and premium grocery and merchandise along with an enjoyable foodservice experience.”