Savings bond in store at Sainsbury’s

Chief executive Justin King is said to have asked the board to examine the plan in detail, with a decision on whether to go ahead to be made in the summer, according to a report.

In March, rival retailer John Lewis launched a £50m bond that was oversubscribed after 11 days. Its bond, which was targeted at store card holders and staff, paid out 4.5 per cent in cash plus a further two per cent in John Lewis vouchers.

Tesco launched a £125m bond in February open to any investor that paid interest at 5.2 per cent, but closed the scheme after two weeks because demand was so strong.

The move by Sainsbury’s, which is said to be looking at raising more than John Lewis, comes as the number of savings accounts that offer a real rate of interest over and above inflation continue to dwindle. Consumer price inflation is currently 4.5 per cent.

Sainsbury’s declined to comment on the report.