Co-operative Group is to spend £25m on a project to fully integrate the Somerfield business, including major IT system changes.
This week the grocer will kick off a programme to roll out Co-op’s EPoS system in the old Somerfield stores. About 200 will be refitted this year and 700 are due to be converted to the Co-op brand, with new systems by August 2010.
Speaking at last week’s Retail IT Summit, Co-operative Group director of food retail information systems Mark Hale said Co-op is taking the “best of the best” approach to people, systems and processes.
Co-op will move to Somerfield’s central replenishment software in 2011, which is considered better than Co-op’s existing system. It will cost nearly £6m to change, but is expected to generate £10m in benefits in two years.
Co-op also plans to consolidate some of Somerfield’s distribution facilities, but will roll out the Manhattan Associates warehouse management system – which it is in the process of introducing to its own distribution centres – to the Somerfield sites that are retained.
Both businesses were already using time and attendance and labour-scheduling systems from Kronos, and Co-op will combine the two instances of the systems to create a single platform for the business.
Hale said that in total £11m in IT synergies have been identified from the two businesses.
New roles will be created in Co-op’s IT department and the outsourcing deal Somerfield had with Tata Consultancy Services is to come to an end, although Co-op will continue to work with the Indian outsourcer, for instance on the development of the central replenishment system for the whole business.