Somerfield to sell off hundreds of stores

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The Independent Online

Struggling supermarket chain Somerfield is to sell off hundreds of stores in a bid to turn itself around, the company announced today.

Struggling supermarket chain Somerfield is to sell off hundreds of stores in a bid to turn itself around, the company announced today.

The group plans to sell up to 140 of its Somerfield stores and 350 of the Kwik Save stores it bought up last year.

The overhaul came as the company reported a worsening sales performance in the second quarter of the year.

Like-for-like sales across the group were down 8.1% over the three months to November 6.

Worst effected were the Kwik Save stores where like-for-like sales plunged 16% in the second quarter, but Somerfield branded stores also saw sales fall 1.4%.

The company said its strategy world now be to focus on small and medium sized stores offering convenience shopping, and avoid competing in the growing out-of-town supermarket business where price competition was intense.

Between 100 and 140 of Somerfields largest stores will be sold off to meet the new strategy.

The group also said it was seeking buyers for the Kwik-Save division which includes 350 stores which the company said are not suitable for conversion to the Somerfield brand.

The company also plans to speed up the conversion of 400 Kwik Save stores which it has selected as suitable for conversion.

At the same time as unveiling its new strategy Somerfield announced its chairman Andrew Thomas was retiring with immediate effect.

Mr Thomas has held the post since 1996 when Somerfield was floated on the stock market.

Louis Patten, one of the group's non-executive directors, will act as chairman until a full-time replacement is found.

Somerfield's latest effort to turn around its business follows a warning from the group yesterday that its full year profits would be "towards the lower end of the majority of current analysts' forecasts".

Shares in the group fell by almost 20% yesterday and fell by another 3p to 91p in the first hour of trading today.

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