Arcadia tycoon Sir Philip Green considers launching convenience store chain

The tycoon said there is demand from Bhs customers for a food offer and approximately 150 stores already have food permission.

Green, who also heavily downplayed speculation that he intends to sell Bhs, said a convenience food format has been developed.

A final decision has not yet been made about whether to enter the £36bn market, which is forecast by industry body IGD to grow to be worth £46bn by 2018.

Bhs cafes and restaurants serve 250,000 customers a week and customer research revealed that 80% of the retailer’s shoppers would be keen to buy food alongside the other lines stocked such as fashion and homewares. The retailer has stocked food in the past, but not for many years.

Speaking at the annual results breakfast for Arcadia executives, Green said: “Every one of the major supermarkets seems to think it [convenience] is the way to go. Our customers have said they’d like to buy food. We might have a shot at it.”

Green said that if a decision was made to go ahead, the likelihood would be that it would appoint “a world champion” in food retail to lead the operation.

Convenience is one of the fastest growing and most competitive food retail markets and the leading grocers are keen to expand their estates. M&S recently unveiled plans to add another 150 Simply Food stores to its UK estate, and Sainsbury’s reported yesterday that its convenience business grew by 20% in the first half.

Green also appeared to dismiss speculation that he will sell Bhs. He said: “We are not in negotiations with anybody, at all.”

He added: “Does that mean it’s not for sale? Nothing’s not for sale.”

Arcadia, which owns retailers including Topshop, Miss Selfridge and Dorothy Perkins, revealed that in the year to August 31 underlying pre-tax profit before exceptional items was £167.8m, up 0.5% from £166.9m the previous year.

Total sales jumped to £2.74bn, up 2% against £2.68bn the prior year but like-for-like sales slipped 2.7%.