“There have been a lot of changes in the market on price, with the success of the discounters and the supermarkets’ 50p promotions,” Hurrell said. “If we are going to be the fifth-biggest player, we have to respond to this. By far the biggest benefit to the Somerfield acquisition is that we will be able to improve our buying terms.”
Sales in its food business rose 43.5% to £2.4bn in the six months to 26 July, with like-for-like sales up 5% and trading profit up 67.7% to £126m. Stripping out the merger with United Co-op last July, sales would have increased 7.4% and trading profit 28.2%.
The ongoing store refurb programme and own-label rebranding had boosted sales, he added. Some 1,100 products had already been rebranded, with 90% of all own-label lines due to be updated by March. The remaining 10% would be completed by the end of 2009. Its Truly Irresistible range now boasted 350 lines and the brand would be worth £150m this year.