Sources close to negotiations said a deal, which would propel the Co-op Group to the UK's fifth-biggest supermarket with 3,123 stores and a market share of about 7%, could be sewn up in the next fortnight.
The proposed price is understood to be in the region of £1.6bn to £1.7bn, far lower than the £2bn to £2.5bn that Somerfield's owners Apax Partners, Barclays Capital, Robert Tchenguiz and Kaupthing Bank were hoping for.
Retailers also came forward this week to stake their claim on any stores the Co-op Group might offload after buying the 900-store chain.
Smaller co-operative societies served by Co-operative Retail Trading Group, the central buying group for societies controlled by the Co-operative Group, told The Grocer they would be interested in picking up stores in their trading areas if the price were right. Discount retailers Poundland, Home Bargains and B&M Bargains also joined Iceland in expressing an interest, saying they were always on the hunt for new stores that fitted their criteria.
And although a source close to the deal said Aldi would be interested in unwanted stores, Aldi MD Paul Foley ruled his company out.
"Our stores are purposefully designed for efficiency," he said. "It's not easy for us to take over other people's stores, and it's very difficult for us to take a large quantity of other companies' staff because our product range is unique. We like organic growth."