Co-op: Somerfield sales are not haemorrhaging
A spokeswoman told FoodManufacture.co.uk: “Somerfield was and is trading in line with our expectations. Sales are lower due to a number of integration factors – not least the fact that we have significantly lowered prices for consumers since buying the chain.”
She added: “We have always said that integrating two big businesses like this would be a complex matter.
"But we remain on track and will provide an update when we release our interim results towards the end of August.”
Len Wardle, chair of the Co-operative Group’s board, also issued a statement stressing that the transformation programme was going according to plan: "The process of integrating Somerfield into the Co-operative family is on track.Sales are lower, not least because we’ve cut prices for shoppers.”
However, one food manufacturer told FoodManufacture.co.uk that forecasts were not being met: "Sales are not in line with plan. Prices have not reduced versus previous prices, generally, but suppliers' margins were conditioned by anticipated volume gains that have not materialised, so I suspect that there are many dissatisfied suppliers out there feeling misled."
Somerfield’s replenishment and supply chain systems will be rolled out across the Co-op Group during the second half of this year, while the rationalisation of own-label ranges will be completed by October as the integration gathers pace.
While all commercial relationships with suppliers are now being handled by the Co-operative Retail Trading Group (CRTG), the Somerfield head office in Bristol “still has a number of support functions operating” and will remain open until the fourth quarter of 2010, said the Co-op Group spokeswoman.
