Somerfield has said that plans to grow its franchise operation have been put on hold.
There are currently five independent Somerfield Essentials franchise holders and seven TM Retail stores trading under the name.
A further 23 c-stores were due to be converted by the end of the year, but the franchise rollout has been delayed as Somerfield said it had to resolve issues that have cropped up in
its trial stores, believed to be problems with IT and ranging.
The requirements of franchisees are said to differ from those of company-operated stores and more time was needed to further develop support infrastructure.
Steve Henshaw, head of the convenience business, said franchising still represented a significant opportunity. “It is key to our strategy, so it is important we spend time adjusting the model before a large-scale rollout.”
The announcement follows the news that one franchise holder, Raj Patel, has left the business. He converted his Castle Vale store in Birmingham to a Somerfield franchise one year ago but has decided to return to Nisa.
Meanwhile, Somerfield has released a statement declaring that its pension scheme deficit has risen by 49.3%.
The shortfall was £75.2m in April 2004 and had jumped to £112.3m by April 2005.
However, RW Baird retail analyst Paul Smiddy said the rise in the deficit should not have a serious effect on the potential sale of the business.
Somerfield has opened up its books to potential bidders, which include Baugur, Apax Partners, Robert Tchenguiz and Barclay Capital consortium, London Regional Properties/ Nomura partnership and United Co-operatives.