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Sir Stelios Haji-Ioannou, chairman of the signature EasyGroup is poised to add supermarkets to his stable of low-cost businesses, which spans hotels and office rentals to car hire and pizza deliveries.
The EasyJet founder said in an announcement on Monday that he will open a supermarket in a former office block in Croydon that he is turning into a home for a number of his companies.
The supermarket, which will be under the easyFoodstore banner, will seek to take on German discount grocers Aldi and Lidl with a range of non-branded tinned and packet foods, and possibly some household items such as washing powder. It is unlikely to stock much fresh and frozen food, according to a report in the Financial Times.
Stelios said his interest had also been sparked by the widespread use of food banks and his own experience with the “food from the heart” charitable program operated by his philanthropic foundation in Cyprus.
“I have a feeling that there is a gap in the food retail market – a niche below some of the current budget operators such as Aldi and Lidl,” he said.
The easyFoodstore will be on the ground floor of the former MetLife office block in Croydon, with the top three floors converted into an easyHotel, and the lower floors let as short-term office space under the easyOffice banner. There is also an option to use a further two floors for an easyGym.
“If the pilot site shows there is a need for this offering, easyFoodstore could be rolled out on a wider basis from 2014 onwards using freehold retail sites – buying into the weaker real estate prices in the sector,” he said, adding that this was a “low risk experiment”.
The move comes as the hard discounters continue to gain market share – particularly from cash-strapped middle-class shoppers.
Listed by Forbes as the third most wealthy Cypriot billionaire, Stelios is easyJet's largest single shareholder despite being at odds with the airline he set up in 1995 since he quit its board in 2010.
Only last month he opposed a plan to buy 135 new Airbus planes after investors representing 57% of its shares backed the deal.
Stelios had said he would vote against the fleet expansion after arguing the deal would destroy shareholder value and that the money would be better spent on improving returns to investors through dividends or share buybacks.
Stelios still has a 37% stake and frequently disagrees with the airline on fleet expansion, executive pay and dividend policy.
EasyJet had defended the deal, saying it had negotiated a "very substantial" discount for the jets, which have a list price of around $12 bln.
Two thirds of the new planes will be used to replace its ageing 156-seat A319s, the bulk of its fleet, the airline said.
