Co-operative down-plays Somerfield ‘crisis’

THE Co-operative Group has stated that the ‘sharp fall’ in sales experienced in its Somerfield stores is in line with its expectations as it cut costs for customers.

The information came to light as a result of a leaked board report dated April 20  which showed that sales at the shops which were converted to the Co-op brand have dropped 12.2% in the year to date.

Retail Week magazine also reported that sales had fallen by 14.1% in the most recent month and that business is trading at £33m below budget for the first two months of 2010.

A spokesman told TheBusinessDesk.com that the fall in trading is in line with its expectations following the integration of Somerfield into the Co-operative Group.

She said: “Only weeks ago we reported record sales and profits for last year and we remain confident that our interim results due at the end of August will continue that trend. 

“Somerfield was and is trading in line with our expectations. Sales are lower due to a number of integration factors – not least the fact that we have significantly lowered prices for customers since buying the chain.

“In the pre-acquisition food stores sales and profits are growing strongly year on year.

“We have always said that integrating two big businesses like this would be a complex matter.

“Our strategy remains to protect and grow profitability, while ensuring the best possible value and service for customers.

“In buying Somerfield The Co-operative Group was doing what it does best – investing for the long term. We remain on track and will provide an update when we release our interim results towards the end of August.”