Co-op to ramp up store openings from next year

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The Independent Online

The co-operative Group is to crank up its store opening programme from next year after it has completed its integration with Somerfield.

The UK's fifth biggest grocer, which acquired Somerfield for £1.56bn last year, will only open about 20 stores this year, as it integrates the store operations, supply chains, IT systems and workforce of both businesses.

But in 2011, the Co-operative Group will open 50 stores and increase this to between 150 and 200 the following year – up to a ten-fold rise on the 2010 number.

The opening plans demonstrate the scale of the Co-operative Group's ambitions in the fiercely competitive UK grocery market. The Manchester-based chain has already converted about half of the 600-plus Somerfield stores to its own brand and plans to complete the rebranding by early 2011.

The group has denied that the integration of the two businesses is not going as smoothly as it expected. A leaked board report dated 20 April revealed that Somerfield's sales had plummeted for the year to date. But Co-operative stressed that Somerfield is trading in line with expectations and partly attributed the fall in sales to it lowering its prices.

Earlier this week, it emerged that the group has taken on just 150 out of more than 1,000 staff at Somerfield's head office in Bristol, which it will close next year. For the 51 weeks to 2 January, the Co-operative's food division delivered trading profits up by 31 per cent to £286m.

The Co-operative Group typically runs shops sized between 2,000 and 20,000sq ft. But its rivals, including Tesco, Sainsbury's, Morrisons, Waitrose and Asda, are also targeting shops smaller than 20,000sq ft.

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