Somerfield sales under pressure
Expansion lifts market share
Somerfield has increased its market share through its expansion progamme, but is seeing like-for-likes suffer as supermarkets compete for cautious consumer spending.
The addition of the 111 Safeway Compact stores acquired from Somerfield has seen the Somerfield fascia increase from 3.5 per cent to 4.2 per cent in the year to April 30. Group share, including Kwik Save, is up to 6 per cent.
However, group like-for-like sales declined by 0.4 per cent across the year, with a 0.6 increase in the first half followed by a 1.5 per cent decline in the second half.
Somerfield, which is currently considering three takeover approaches, said like-for-likes in the second half were hit by the slowdown in consumer spending, the increasingly competitive trading environment and the impact of the store conversion programme. Margins across both fascias have remained stable, with group margin helped by the uplift in stores switched from Kwik Save to Somerfield.
Steve Back, chief executive, said: “Although trading conditions remain challenging, I am pleased with the group’s progress as we continue to implement our strategic plan, whilst still delivering a satisfactory overall trading result from an enlarged store portfolio.
“The significant portfolio realignment and expansion through the conversion programme, the Safeway Compact Stores acquisition and the recently announced petrol forecourt convenience store acquisitions from Texaco and Fuelforce have strengthened the group and will further increase our market penetration.”
