Co-op and Somerfield ranges to align by end of September

Keener prices from manufacturers following the acquisition of Somerfield have also helped the Co-op Group extract £100m more in synergy savings than the £200m originally budgeted, revealed bosses, although they have not said how much of the total cost saving was derived from better terms: “We're not breaking these out.”​

A spokeswoman told FoodManufacture.co.uk: “The alignment of the Somerfield and Co-operative ranges will be complete by the end of September 2010 when we will have moved to a common range. This alignment includes all lines, branded and own-label.”​

Central replenishment and ranging​

Meanwhile, the SMART (Store Merchandising and Replenishment Transformation) programme - which will see Somerfield central replenishment and ranging systems modified to work in the Co-operative environment – was being rolled out across the entire food estate, she added.

While all commercial relationships with suppliers are now being handled by the Co-operative Retail Trading Group (CRTG), the Somerfield head office in Bristol would remain open until next summer, she said.

“Current operations at the Somerfield HQ include finance, IT and supply chain support. We expect to complete the wind down of these by June 2011.”​

Food like-for-like sales down 1%​

The Co-op Group, which now has a 7.6% share of the grocery market behind Morrisons at 11.6%, Sainsbury’s at 16.1%, Asda at 16.9% and Tesco at 30.8%, said like-for-like sales in re-branded Co-op food stores and converted Somerfield stores grew by 2.5%.

However, weaker sales from Somerfield stores awaiting conversion dragged down ​overall like-for-like sales in the food estate to -1%.

To date, more than half of the Somerfield stores have been converted to the Co-operative brand, along with 88% of the Co-op (pre-Somerfield) food store estate, with the entire estate due to be trading under the new Co-operative fascia by early next year.

No signs of recovery until late 2011​

Chief executive Peter Marks said 2010 had been “challenging​” and that he did not expect to see the signs of recovery “until late 2011 at the earliest”.​

However, the integration of Somerfield was on track. “We said that to be successful the integration needed to be done at pace: one business within two years. That is still our plan and we are on track to deliver it by the first quarter of 2011.”​

The Co-op Group posted a 12.6% rise in first-half underlying trading profit to £169.7m on sales up 11.5% to £3.9bn in its food business.