Waitrose selling two Manchester stores to the Co-op

Two Waitrose convenience stores in Manchester are being sold by parent group the John Lewis Partnership after it warned it would not make a half year profit this year.

The group is selling a total of four small convenience stores to the Co-op Group, in Manchester’s Piccadilly and Spinningfields, as well as Birmingham and London.

It is also selling a Waitrose supermarket in London’s Camden to Aldi, it announced at a strategy briefing today.

Details of the sales agreements are not yet finalised, but it is expected that the sales of all the shops will be completed by the autumn.

Partners, or staff, at the shops being acquired by the Co-op will transfer to the Co-op under TUPE (Transfer of Undertakings, Protection of Employment regulations).

Aldi does not plan to open in Camden for at least six months to undertake work to the unit, which means the shop will close, but a spokesman said the retailer will “explore opportunities within the Partnership for its Camden Partners and others who wish to remain with the business”.

Ben Stimson, Waitrose retail director, said: “The sale of these shops is not something we take lightly, but we have accepted offers for them as it is sadly – despite the best efforts of everyone involved – not commercially viable for us to continue trading from them in the long term.

“Our priority is the wellbeing of our Partners working in those shops who will be fully supported throughout the process and we will identify opportunities for those wishing to remain with the business wherever possible.”

The group was at pains to stress no stores are closing, but being sold on to new operators instead.

The Spinningfields, store, comprising 3,100 sq ft, opened in November 2010, while the 3,000 sq ft Piccadilly site opened in October 2014.

The group said it expects its full year profit to be “substantially lower” compared with the previous year’s figures.

Despite announcing £500m of fresh investment over the next few years, the Partnership’s woes reflect the current parlous state of trading on the high street.

Sir Charlie Mayfield, chairman of the John Lewis Partnership, said: “It is very important that we feel the jeopardy of what is happening right now.”

A statement issued today by the group said it expects to see profit growth in its Waitrose brand, a decline in the John Lewis brand, and significant extra costs at the Partnership level as a result of greater IT investment, which will be a big driver behind the overall profit change.

“Today the Partnership has announced that it will take steps to strengthen its balance sheet by a further £500m over three years to invest in product and service innovation.

“This will be achieved by rebuilding profitability at Waitrose, creating more value from the property estate, and conducting a review of the Partnership’s pension scheme,” the statement said.

Overall, the group has 353 Waitrose shops and 50 John Lewis sites.