The group already operates 60 shops under the Somerfield name and its 'Somerfield' own-brand accounts for a growing share of sales in both Somerfield and Gateway stores.
For the past six months David Simons, chief executive, has conducted a comprehensive trial, comparing a handful of stores of each type under similar conditions. The conversions will probably take several years and be more than just cosmetic. There is likely to be better presentation and more fresh produce.
Mr Simons has already begun the task of shedding the group's pricey image, cutting prices aggressively. Sales grew a respectable 3 per cent in the Christmas period. But Gateway is still regarded as tatty - a legacy of years of cash starvation.
It is thought that the group will continue to expand the Food Giant discount format - from 25 to a planned 40 outlets.
Gateway has operated at arm's length from its debt-crippled parent, Isosceles, after a third restructuring last year. It is ring-fenced from all but pounds 500m of borrowings.
A Gateway spokesman said an announcement would be made this Thursday, but would not comment further.
Gateway was put together in the mid 1980s from a hotchpotch of grocers including Fine Fare, International Stores and Key Markets.Reuse content