Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education
BBC Homepagelow graphics version | feedback | help
BBC News Online
 You are in: Business
Front Page 
World 
UK 
UK Politics 
Business 
Market Data 
Economy 
Companies 
E-Commerce 
Your Money 
Business Basics 
Sci/Tech 
Health 
Education 
Sport 
Entertainment 
Talking Point 
In Depth 
AudioVideo 
Wednesday, 26 January, 2000, 09:19 GMT
Somerfield sells stores




UK supermarket group Somerfield has announced a further drop in profits - and that it has sold 45 of its bigger stores for 305m.

Somerfield's pre-tax profits in the half-year to 6 November slumped by 47% to 60m. Sales for the period were 3.19bn, down from 3.44bn.

The worst performance was from its Kwik Save outlets, where sales fell 15.8%.

The group issued a warning last autumn that its profits would fall because of fierce competition and problems integrating the Kwik Saves stores it took over two years ago.

Sell off

It is now in the process of selling hundreds of its stores, with Tesco, Sainsbury, Asda and Waitrose all interested.

Waitrose has just announced it is buying 11 of them, subject to completing formalities.

Waitrose says the acquisition will give 250,000 new customers per week the opportunity to shop in its stores.

It said all 1,763 Somerfield staff would be taken on, bringing the Waitrose workforce to more than 25,000 full and part-time staff in the south of England, East Anglia, the Midlands and Wales.

Restructuring

Last year, Somerfield announced plans to sell about 140 of its larger stores as part of a scheme to focus on smaller neighbourhood outlets.

It has now decided it will not sell 57 of these as it has not received "acceptable offers".

Somerfield's woes began soon after it took over the Kwik Save group in early 1998.

The discount supermarkets have failed to perform and the group has been forced to change strategy.

Profit warnings

About half the Kwik Save outlets are being converted to the Somerfield name while the rest - some 350 stores - are up for sale.

Over the past year, the group has issued three successive profit warnings and in November Tony O'Neill, managing director of its stores division, quit the company.

With rumours of consolidation in the supermarket sector rife, Somerfield has been tipped as a likely takeover target.

The interim dividend has been cut to 1.5 pence, down from 4.5p last year.

Search BBC News Online

Advanced search options
Launch console
BBC RADIO NEWS
BBC ONE TV NEWS
WORLD NEWS SUMMARY
PROGRAMMES GUIDE

See also:
11 Nov 99 |  The Company File
Somerfield slims down
13 Sep 99 |  The Company File
Kwik loss for Somerfield
24 Jan 00 |  Business
A Merry e-Christmas for UK?

Internet links:

The BBC is not responsible for the content of external internet sites
Links to other Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories