Somerfield has hatched plans to open 250 new stores in the next three years, an ambitious aim that would effectively increase its store portfolio by more than a quarter.
Following the sale of Somerfield in January 2006 to a consortium comprising property tycoon Robert Tchenguiz, Apax Partners and Barclays Capital, the Bristol-based chain has been through a period of transformation, closing 600 branches, selling discount chain Kwik Save, reducing its head office count from 1,800 to 800 and shutting six of its 10 distribution centres.
Somerfield has also focused on improving the execution of its basic retail disciplines, both reducing its product range to create what it hopes is a more coherent offer, and enhancing in-store navigation. Like-for-like sales are up in the mid-single digits for the most recent quarter, with smaller stores performing very well, in areas where Somerfield has deliberately distanced its offer from the big four.
Chief executive Paul Mason has now used a comparative position of strength to launch an assault on the UK ‘local’ market, a continuation of his attempts to position Somerfield to use its scale and branding to gain competitive advantage over independents and smaller grocery chains, while staying out of the cut-throat superstore sector. According to some press reports, Somerfield has also recognised the need to to improve its price position, which is out of kilter with its main rivals.
