Kwik Save closures threaten 400 jobs

The Kwik Save supermarket chain is to vanish in Scotland in a move that puts up to 400 jobs at risk, Somerfield revealed yesterday.

The group is planning to close 22 Kwik Save stores and convert a further 29 to its Somerfield brand in an attempt to accelerate its recovery.

It insisted that the future of its 600 remaining Kwik Save stores in England and Wales was not in doubt, adding it remained "committed" to the brand. It also pledged to maintain its presence in Scotland, where it recently acquired the Aberness convenience business.

Steve Back, the finance director, said a review of the region prompted the group to conclude "it would be sensible to make a move away from Kwik Save". Sales at its Scottish Kwik Save stores were dragging down the rest of the estate's performance, he admitted.

Analysts estimated it would cost the group up to £30m to convert the sites to its Somerfield fascia, although they expect the cost of closing the remaining 22 stores to be covered by the sale of its East Kilbride depot.

Mr Back said it was too early to gauge how many Kwik Save staff would be retained elsewhere across the group, but admitted that "up to 400 jobs are at risk". The company informed the affected staff only yesterday, he added.

The group, which has staked its future on the convenience store market, is overhauling its entire estate. It has refurbished about one-third of its 600 Somerfield stores and 85 of its Kwik Save estate. It is due to update the market on its full-year sales performance today.

The group is working on initiatives to drive its sales, from inviting other retailers such as the discount clothing chain Peacock into its largest stores, to teaming up with other retailers such as the newsagent Martins to open joint stores.