Somerfield core like-for-likes stronger
Kwik Save stores ‘volatile’
September 3 2003
Like-for-like sales have improved at supermarket chain Somerfield across the supermarket operator’s first quarter, up 2 per cent in the 16 weeks to August 16.
The peformance is an improvement on growth of 0.9 per cent in the chain in the year to April 26. However, the group’s Kwik Save chain has performed less well, with like-for-likes down 0.5 per cent across the 16 weeks.
Group like-for-like sales were up 0.5 per cent across the entire first quarter, but fell 0.2 per cent in the seven weeks to August 16 due to the impact of lower like-for-likes at Kwik Save.
The group said that in the Somerfield chain, the increase in the number of refitted stores has driven the improvement in like-for-like sales, with the chain also boosted by the good weather. So far, 120 stores have been refitted out of the total Somerfield estate of 591.
Somerfield said cash sales at Kwik Save have been relatively static over the last 4 months, but like-for-like sales in the last seven weeks have been volatile against comparisons with last year, when Kwik Save sales were boosted by a strong promotional programme.
Investment in new Kwik Save stores is at a very early stage, with 14 concept stores completed at the year end, “so growth achieved from the refitted stores has had a negligible impact on sales performance.” By November, another 50 new stores will be completed out of a total Kwik Save estate of 661.
In June, Somerfield rejected a 120p-a-share bid from entrepreneurs John Lovering and Bob Mackenzie, and the following month former Somerfield director Gareth Jones was reported to be talking to venture capitalists about a possible bid.
The stronger sales perfomance may give the Somerfield management some breathing space, Icelandic retailer Baugur, whch has a stake in the business, is known to have been pressing for signs of improvement.
