Co-op completes £1.6bn takeover of Somerfield chain

Mar 3 2009 by Iain Laing, The Journal

THE Co-operative Group today completed its £1.6bn takeover of grocery chain Somerfield, a move cementing its position as the UK’s fifth largest food retailer.

The tie-up has created a chain of around 3,000 outlets with a market share of 8% and annual sales exceeding £7bn.

It also marks the closing chapter for Somerfield, which traces its history back to a small family grocery store more than 130 years ago.

Co-operative Group chief executive Peter Marks said: “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.”

The Co-op is taking on more than 650 Somerfield stores, but has had to offload branches in areas where watchdogs had concerns over competition.

The integration process is expected to take up to two years, as Somerfield’s stores are gradually converted to The Co-operative brand.

The UK’s biggest mutual retailer will close Somerfield’s Bristol headquarters in around 18 months, in a move affecting around 750 staff.

The Co-op hopes to be able to relocate “as many as possible” of Somerfield’s employees to the merged head office in Manchester.