• membership
• news
• The Co-operative Group completes its acquisition of Somerfield

The Co-operative Group completes its acquisition of Somerfield

The Co-operative Group, the UK’s largest mutual retailer, has completed its £1.565billion acquisition of the Somerfield supermarket chain.

The deal propels The Co-operative into the 'premiership' of food retailers, creating a stronger fifth player in the UK grocery market with 8% market share and 3,000 stores generating annual sales in excess of £7billion.

“This is great news for customers of both The
Co-operative and Somerfield. It is a transformational deal which cements our position as the UK’s number one community retailer and returns us to the premiership of food retailers. It is no longer the Big Four; it’s the Big Five,” said Peter Marks, Chief Executive of The Co-operative Group.

“Our first priority now is to start integrating the two businesses – something that will bring real scale benefits, enabling us to provide better value to our customers. There is a strong strategic fit between these businesses and we are looking forward to creating a single business combining the inherent strengths of both Somerfield and The Co-operative Group.

“Somerfield has some great people and we are delighted to welcome them to The Co-operative family.

“The Co-operative business model, built on trust and sound business ethics, is experiencing a renaissance as consumers increasingly appreciate the integrity of our brand, whether it be as a food retailer, a financial services provider or one of our other community businesses. The acquisition of Somerfield and the proposed merger with the Britannia Building Society, set us up for an exciting future,” added Mr Marks.

The enlarged food business will be headed by The Group’s managing director for food, Tim Hurrell. The integration process is likely to take up to two years, with the Somerfield brand remaining in some locations throughout that period as stores are gradually converted to The
Co-operative brand. The Somerfield Bristol headquarters will be retained for about 18 months, while all head office functions are moved to Manchester on a phased basis. Relocation opportunities will be offered to as many staff as possible.

Since taking the helm 20 months ago as Chief Executive of The Co-operative Group, Peter Marks and his team have turned around The Group’s performance. After 12 successive quarters of like-for-like growth, sales (excluding fuel) in The Group’s food stores in the seven weeks to 21 February were 6.2% up on last year, whilst sales in its 700 re-branded food stores were up on average 12%. Over the same period like-for-like sales in Somerfield were up 3.6% and in stores less than 5,000 sq ft, were up 7.4%.

The Co-operative Group, which also has interests spanning financial services, pharmacy, funerals, travel and farming, has just announced a record advertising spend of £70million this year. This includes a £10million campaign to support the largest re-branding exercise in UK corporate history. To date, as part of a £1.5billion makeover, The Group has refitted and re-branded 2,700 of its 4,300 outlets with the new-look The Co-operative identity.

Commenting on the The Co-operative Group’s acquisition, Paul Mason, Chief Executive of Somerfield said: “Today marks the culmination of the phenomenal turnaround in the Somerfield business over the last three years. The Co-operative Group is buying a business that is in rude health, with strong, positive like-for-like sales, and a profit margin that has doubled since the business was taken private in 2005. I would like to thank my senior management team and all those colleagues who have made this transformation possible.

“This is an exciting time to become part of The Co-operative Group and is good news for our Somerfield colleagues. The Co-operative Group is enjoying a renaissance since the merger with United. It is the leader in the small store and convenience market, which is forecast to continue to enjoy good growth going forward. It is also a business that has trust and ethics at the core of its brand,” he added.


Read a message from Len Wardle, Chair of The Co-operative Group 

More about The Co-operative Group 

Find out more about our family of businesses