Retailers Digest Somerfield Buy-out

With Somerfield’s 880 local grocery retail outlets, the combined food business will operate more than 3,000 stores in the UK. The operation is expected to generate net sales of around £8bn, making the group a market leader in convenience food retailing and the fifth largest food retailer in the UK.

Peter Marks, chief executive of The Co-operative Group, says, “This is good news for consumers and for competition in the grocery market where we will create a stronger fifth player in food and a convenience store chain with unrivalled geographic reach.

“For The Co-operative Group this is a transformational deal – cementing our position as the UK’s premier community retailer and helping us significantly as we lead a renaissance of the Co-operative brand.”

Mr Marks sees the deal as an important step to cement The Co-operative Group’s three year growth plan. “We are revitalising our retail estate under a single unified brand – modernising our stores, improving our product offer and service levels for customers and members and reinforcing our Co-operative difference.”

The move has been received cautiously by those operating on the high street. Simon Marrison at the Manningtree Deli explains, “You have to be careful of creating a monopoly. At the moment, you’ve only got four or five main players on the sector and that’s not really good. I think this acquisition signals a further loss of choice for consumers. We are at risk of finding the same products at the same price everywhere.”

However, Mr Marrison doesn’t believe the situation will have too negative an impact on independent retailers, “All in all, I don’t think things will be any different – a supermarket is a supermarket in the end. If Waitrose had made the acquisition my answer would have been different as they would have brought more competition to fine food outlets.”

Photography courtesy of Somerfield Plc