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Last Updated: Tuesday, 26 July 2005, 09:40 GMT 10:40 UK
Somerfield faces forced shop sale
Somerfield store
The stores in question are across England and Scotland
UK supermarket group Somerfield may be forced by the Competition Commission to sell 14 of the local stores it bought from rival grocer Morrisons.

Morrisons sold the outlets following its acquisition of supermarket chain Safeway in 2004, as it only wanted to run larger stores.

Somerfield bought 115 ex-Safeway shops for 260m, but the commission believes this reduced competition in 14 towns.

Somerfield has until 16 August to respond to the commission's remarks.

'Wider choice'

"We identified stores in 14 areas where we have provisionally found that the acquisition is expected significantly to reduce competition - resulting in higher prices, or reductions in quality, range or service," said Christopher Clarke, chairman of the commission's inquiry.

THE STORES CAUSING COMPETITION CONCERN
Bedlington, Northumberland
Filey, North Yorkshire
Johnstone and Paisley, Renfrewshire
Kelso and Peebles, Scottish Borders
Littlehampton, West Sussex
Middlesbrough Linthorpe
Newark
Pocklington, East Riding
Poole Bearwood
South Shields
Whitburn, West Lothian
Yarm, Stockton-on-Tees

"We believe the only effective means of restoring competition in these areas is for the identified stores to be sold to a suitable grocery retailer who will offer choice and actively compete in the relevant local markets."

Somerfield responded: "Somerfield notes the provisional findings of the Competition Commission and will be making further representations both in writing and at the remedies hearing in early August."

Most of the stores bought by Somerfield are "mid-range" outlets, which had been acquired by Morrisons in its Safeway takeover.

Somerfield completed the stores transfer this spring and has introduced a three-year refurbishment programme.

Earlier this month Icelandic investment firm Baugur abandoned plans to acquire Somerfield, the UK's fifth largest supermarket chain, and sold its 5% stake.




SEE ALSO:
Competition hits Somerfield sales
06 Jul 05 |  Business
Suitor quits Somerfield bid race
28 Jun 05 |  Business
Baugur drops Somerfield bid plans
14 Jul 05 |  Business
Somerfield sales 'under pressure'
11 May 05 |  Business
Co-op joins Somerfield bid fray
06 May 05 |  Business


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