Statement re Homebase

SAINSBURY (J) PLC
17 August 1999

J Sainsbury plc announces plans to improve the space productivity and reduce
the cost base of Homebase.

Homebase, J Sainsbury plc's home improvement and garden centre business, today
announces the closure of its 99 remaining in-store kitchen studios and
initiatives to improve the efficiency of its 288 stores.

Together these actions are part of our plan to deliver net savings of £30
million over three years by significantly improving sales per square foot and
reducing our cost base. These savings will be reinvested to increase
profitability by improving the customer offer. In the current year Homebase
will incur a total exceptional charge of £15.5 million consisting of £6.5
million for redundancy costs and £9 million for kitchen closures. A net 550
jobs will be eliminated as a result of these actions.

David Bremner, Deputy Group Chief Executive and Chairman of Homebase comments:

'These actions underscore our commitment to produce increased profits from our
existing assets. We will do this by offering our customers outstanding choice,
value and service. Over the past few years we have invested heavily in our
store infrastructure and must ensure we are maximising the value from that
investment. These initiatives will have a marginally positive effect on the
profits in the current year, before one-off costs and will, through further
reinvestment in the customer offer, improve profitability next year.'

Strategic Context
As we outlined in June, over the last 12 months the competitive environment
has toughened considerably. In response, Homebase outlined plans to strengthen
its market position on three fronts:

1. Grow market share by improving the offer to customers.

2. Protect and then grow profitability by improving its cost base and
therefore increasing returns from existing investments.

3. Develop a new large format store to exploit new and larger market
opportunities and create a differentiated offer.

Today's actions are directed at the second of these targets, protecting
profitability in the short term and increasing profits in the medium term.

Since March, Homebase has also made progress on the first of these targets
delivering strong like-for-like sales growth and market share gains from a
static stores base.

Finally, Homebase will open two large format stores in Dundee and Greenwich in
October and November 1999.

Kitchen Business
This product area was forecasted to lose at least £5 million in the current
year. In its place we intend to significantly increase the range of rugs,
tiles and general flooring products enabling us to capture a larger share of
the £700 million annual market in these ranges.

Reducing the cost base
Removing one complete layer of management and eliminating non-value adding
jobs in stores is a large part of the previously announced £30 million cost
reduction target. The remainder will be delivered over the next two years
after the necessary investment has been implemented.

Investor Relations: Miranda Pode - 0171 695 6215
Press Office        Pip Wood     - 0171 695 6127