Japanese supermarket operator York Holdings may pursue acquisitions should appropriate opportunities arise, Bloomberg reported, citing director Naofumi Nishi.
Seven & i sold the retail business to Bain Capital last year as it moved to focus on its convenience store operations, following an unsolicited takeover approach from Canada's Alimentation Couche-Tard that was subsequently withdrawn.
York's 30 supermarkets and associated retail outlets now operate independently, as rising prices and cost pressures push consolidation among major supermarket operators.
Nishi, who is also a partner at Bain, told the publication in an interview that such opportunities are “likely to come up” within the next two and a half years, and said the company is in talks with supermarket operators in the Kanto and Tohoku regions of eastern Japan.
Nishi added that preparations for an initial public offering (IPO) of York Holdings remain on track.
The company set up an IPO office this month and is putting in place the structure needed for a listing in the fiscal year ending February 2028, although market conditions and other external factors could affect the timeline.
Under the $5.37bn transaction, Bain holds a 60% stake in York Holdings, with the remainder held by Seven & i and the founding Ito family.
Ito-Yokado, which originally formed the core of the group before the 7-Eleven model took off, had struggled for an extended period amid a weak market.
Following structural reforms, its operating profit for the fiscal year to February more than tripled year-on-year to Y50.3bn ($310.7m).
An acquisition by York of a competing supermarket operator could expedite consolidation across the sector.
Last year, Trial Holdings acquired the Seiyu grocery chain from KKR in a comparable move.
Nishi said York is looking at increasing store density in the Kanto and Tohoku regions, as well as expanding into areas where it currently has no footprint.
Higher construction and labour costs have made opening new stores more difficult, adding to the attractiveness of acquisitions as a route to growth.
The company intends to invest Y150bn by the fiscal year ending February 2029, largely for store renovations, a figure that does not include acquisition-related costs.
Nishi also raised the possibility of selling off non-supermarket retail businesses such as Loft, which could allow expansion into shopping centres run by rival operators.
