The Co-operative Group has sealed its long-awaited £1.56 billion deal to buy Somerfield.
The combined business will operate more than 3,000 stores and generate net sales of about£8 billion, making it the market leader in convenience food retailing and the fifth largest food retailer in the UK, with a market share of about 8 per cent.
The Co-operative Group chief executive Peter Marks said: “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.
“The acquisition of Somerfield will provide the rocket fuel for our three-year growth plan, outlined in April of this year. Under this 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.”
Somerfield operates about 880 local grocery retail outlets across the UK. It is not yet known how many of the stores may have to be sold off. Marks said: “Given a deal of this nature, there are likely to be some local competition issues. We are confident we will be able to work through these with the Office of Fair Trading.”
Somerfield chief executive Paul Mason said: “Over the past two years we have transformed every aspect of Somerfield – a significant achievement – and, as a result, we are now trading from a position of strength. With Somerfield and The Co-operative Group as one business we believe that we can learn from each others strengths to ensure we continue to develop the best local grocery shops in Britain.”