Co-op: Somerfield sales are not haemorrhaging

By Elaine Watson

- Last updated on GMT

Related tags The co-operative group Somerfield

Co-op: Somerfield sales are not haemorrhaging
The Co-operative Group has insisted that Somerfield stores are performing “in line with our expectations” following press reports suggesting that sales had slumped in response to recent ranging and pricing changes.

A spokeswoman told “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 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.

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