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Travel and Leisure
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Travel and Leisure
Source : (remove) : UNESCO
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UK's Sainsbury's sells travel money business to Fexco

Sainsbury's Divests Travel Money Arm to Fexco in Strategic Portfolio Shift

LONDON – In a move signaling a sharper focus on its core retail operations, British supermarket giant J Sainsbury Plc has announced the sale of its travel money business to Irish financial services firm Fexco. The deal, set to be completed in early 2025, underscores Sainsbury's ongoing efforts to streamline its non-core assets amid a challenging economic landscape for UK retailers. While the financial terms of the transaction were not disclosed, industry analysts suggest it could provide Sainsbury's with a modest capital injection to bolster its grocery and general merchandise divisions.

Sainsbury's, one of the UK's "Big Four" supermarkets alongside Tesco, Asda, and Morrisons, has long diversified its offerings beyond food and household essentials. The travel money business, which includes foreign currency exchange services, prepaid travel cards, and related financial products, has been a fixture in many of its larger stores and online platforms. Launched as part of the company's broader financial services arm, it catered to holidaymakers and international travelers seeking convenient access to euros, dollars, and other currencies without the hassle of bank visits. In recent years, this segment has seen fluctuating demand, buoyed by post-pandemic travel rebounds but hampered by digital alternatives like fintech apps and volatile exchange rates influenced by global events such as Brexit and the Russia-Ukraine conflict.

The decision to offload this unit comes at a time when Sainsbury's is navigating intense competition in the retail sector. Under CEO Simon Roberts, who took the helm in 2020, the company has been pursuing a "Food First" strategy, emphasizing investments in its primary grocery business to counter discounters like Aldi and Lidl, as well as online giants like Amazon. This divestiture aligns with similar moves by Sainsbury's in the past, including the sale of its banking operations to NatWest Group in June 2024 for approximately £2.5 billion. That deal, which involved transferring Sainsbury's Bank – encompassing loans, credit cards, and savings products – to the state-backed lender, was hailed as a way to simplify the company's structure and reduce regulatory burdens associated with financial services.

Fexco, the acquiring party, is a well-established player in the global payments and foreign exchange arena. Founded in 1981 in County Kerry, Ireland, by entrepreneur Brian McCarthy, the company has grown into a multinational entity with operations in over 50 countries. It specializes in currency exchange, money transfers, and payment processing, serving both retail and corporate clients. Fexco's portfolio includes partnerships with major brands in the travel and tourism sectors, such as airlines, hotels, and travel agencies. Notably, it operates the Dynamic Currency Conversion (DCC) service, which allows international cardholders to pay in their home currency at point-of-sale terminals abroad, often at airports and tourist hotspots.

This acquisition represents a strategic expansion for Fexco into the UK retail forex market. By integrating Sainsbury's travel money operations, Fexco gains access to a network of physical locations – including over 500 Sainsbury's stores equipped with bureaux de change – and a established customer base. "We are excited to welcome Sainsbury's travel money customers and colleagues to the Fexco family," said a spokesperson for Fexco in a statement. "This acquisition enhances our ability to deliver seamless, innovative foreign exchange solutions, building on our decades of expertise in helping people manage their money while traveling."

For Sainsbury's, the sale is not just about shedding peripheral businesses but also about reallocating resources to high-growth areas. The retailer has been investing heavily in digital transformation, supply chain efficiencies, and sustainability initiatives to appeal to environmentally conscious consumers. Recent quarters have shown resilience in Sainsbury's performance, with like-for-like sales growth of 4.5% in the first half of 2024, driven by strong demand for its premium Taste the Difference range and Nectar loyalty program. However, inflationary pressures, rising energy costs, and wage hikes have squeezed margins, prompting cost-cutting measures. Analysts at Shore Capital estimate that divesting non-core units like travel money could free up between £50 million and £100 million in capital, though exact figures remain speculative without official disclosure.

The travel money sector itself has evolved dramatically in the digital age. Once dominated by high-street banks and specialist providers like Travelex, it now faces disruption from fintech innovators such as Revolut, Wise (formerly TransferWise), and Monzo, which offer low-fee currency conversion via mobile apps. Sainsbury's entry into this space dates back to the early 2000s, when supermarkets began bundling financial services to boost footfall and customer loyalty. At its peak, the business handled millions in transactions annually, particularly during summer holiday seasons when Britons flock to European destinations. Post-Brexit, demand for euro exchanges surged, but the COVID-19 pandemic dealt a severe blow, with international travel grinding to a halt in 2020-2021.

Industry experts view this sale as part of a broader trend among UK retailers to exit ancillary financial services. Tesco, for instance, sold its banking arm to Barclays in 2023, while Marks & Spencer has scaled back its in-house financial products. "Retailers are realizing that financial services require specialized expertise and regulatory compliance that can distract from their core competencies," noted retail consultant Sarah Thompson of GlobalData. "For Sainsbury's, this allows a laser focus on food retail, where it can leverage its strengths in sourcing and pricing."

From a customer perspective, the transition to Fexco is expected to be smooth, with Sainsbury's assuring that services will continue uninterrupted during the handover period. Existing travel money cards and orders will be honored, and Fexco plans to maintain the in-store presence, potentially rebranding the counters over time. Employees affected by the sale – estimated at around 200 staff members involved in the travel money operations – will transfer to Fexco under TUPE regulations, preserving their terms and conditions.

Looking ahead, this deal could signal further consolidation in the UK's fragmented forex market. Fexco's acquisition bolsters its competitive edge against rivals like Eurochange and No1 Currency, especially as travel volumes recover to pre-pandemic levels. According to the Office for National Statistics, UK residents made over 80 million overseas trips in 2023, a figure projected to rise in 2025 with easing economic uncertainties. For Sainsbury's, the proceeds from this and prior sales could fund expansions like its ambitious plan to open 75 new convenience stores by 2026, enhancing its urban footprint.

In the grander scheme, this transaction reflects the adaptive strategies of legacy retailers in an era of e-commerce dominance and economic volatility. Sainsbury's, with roots tracing back to 1869 as a small dairy shop in London's Drury Lane, has weathered numerous transformations – from wartime rationing to the rise of online shopping. By pruning its portfolio, it positions itself for sustainable growth, potentially eyeing acquisitions or partnerships in adjacent sectors like health and wellness products.

Fexco, meanwhile, continues its trajectory of inorganic growth. The company has a history of strategic buys, including the 2019 acquisition of UK-based Goodbody Stockbrokers and expansions into Asia-Pacific markets. This latest move not only diversifies its revenue streams but also taps into the resilient demand for travel-related financial services, even as digital wallets gain traction.

As the deal progresses toward completion, stakeholders will watch closely for any ripple effects on the UK's retail and financial landscapes. For now, Sainsbury's appears committed to its streamlined vision, betting that a return to retail fundamentals will secure its place in an increasingly competitive market. The sale to Fexco, while modest in scale, marks another chapter in the evolution of one of Britain's most enduring brands.

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Read the Full reuters.com Article at:
[ https://www.reuters.com/business/finance/uks-sainsburys-sells-travel-money-business-fexco-2025-07-30/ ]