United Co-operatives’ surprise entry into the bidding war for Somerfield could be a front for a joint co-operative bid.
Although chief executive Peter Marks initially signalled he had no intention of joining any other bidding groups, United Co-op has since moved swiftly to clarify the position.
It is now insisting that, although there are no current intentions to partner with other bidders, it reserves the right to explore all options available.
Analysts predict one such option could be to divide the Somerfield portfolio between other co-ops. This week Somerfield announced like-for-like sales down 0.4% for the year to April 30 and sales in the second half were down 1.5%.
Tom Fender, MD at Harris International Marketing, said: “The co-operatives stay loyal to trading areas and common sense has it that conversations must have taken place,” he said.
United is carrying out due diligence before making a final decision on submitting a bid, in which Midlands Co-op could have an interest. When Midlands released positive annual results in March, Midlands chief executive Willie Tucker signalled his intent for expansion.
And chief executive of West Midlands Co-operative Ben Reid this week said that he, too, would seize the chance to acquire a suitable chain of c-stores at the right price as his society released encouraging results for the six months to March 26 this week.
Profits were up 33% to £3.04m on group turnover up 8.2% to £93m, and like-for-like sales were up 1.6% on the same period last year. Food group turnover was up 12.2%, but like-for-like sales fell by 1.5%.
Scotmid’s former chief executive Colin Bird previously said the society was aiming to open 10 stores this year.
However, the society doubled its convenience division last summer with the acquisitions of SCS and Morning, Noon and Night and new chief executive John Brodie said that now was a time for consolidation.
Scotmid has announced a record turnover of £357m for the year ending January 29, up 21%, but Brodie expressed his disappointed at the lack of bottom line growth.
One senior convenience insider said he would not rule out The Co-operative Group, the largest co-operative society, picking up some sites.
Meanwhile, the Co-operative Group has appointed former M&S joint managing director Guy McCracken to head its food group following the shock announcement that Eoin McGettigan has been poached by a major European retailer.
It also announced 429 job losses from five regional distribution centres following the opening of its new national distribution centre in Coventry next month, which will create 520 jobs.
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Fiona McLelland