November 11, 2019 / 9:25 AM / a month ago

Britain's Sainsbury's in wholesale deal with Australia's Coles

FILE PHOTO: Shoppers walk past the first 'till-free' Sainsbury's store in London, Britain, May 1, 2019. REUTERS/Toby Melville

LONDON (Reuters) - British supermarket group Sainsbury’s (SBRY.L) has struck a deal to sell packaged groceries and household products in Australia as it seeks to grow its wholesale business, it said on Monday.

Sainsbury’s said it has agreed a wholesale partnership with Australian retailer Coles (COL.AX).

The UK firm’s biggest wholesale deal yet will see it supply own brand products to Coles supermarkets across Australia, as well as online, from early next year. The products will be sold under the Coles brand.

Coles trades from over 2,400 retail outlets, including 800 supermarkets and 200 convenience stores.

No financial details of the deal were disclosed.

Sainsbury’s is stepping-up its pursuit of wholesale business after its botched attempt to take over rival supermarket group Asda (WMT.N) for 7.3 billion pounds ($9.3 billion). The deal was blocked by the competition regulator in April.

The group is lagging its peers in wholesale. Last year market leader Tesco (TSCO.L) purchased wholesaler Booker for nearly 4 billion pounds ($5.1 billion), while No. 4 player Morrisons (MRW.L) has struck a raft of wholesale deals, including with Amazon (AMZN.O) and the McColl’s (MCLSM.L) convenience store chain.

Shares in Sainsbury’s were up 0.6% at 1004 GMT. Its shares are down over the last year by 37.1%.

Last week the group reported a 15% fall in first-half profit but forecast a better second half.

Reporting by James Davey; editing by Kate Holton

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