Those following the ups and downs of The Co-op’s acquisition of Somerfield would not have been surprised by the society’s negative like-for-likes this morning.
Sales in the group’s food stores slipped 1% in the six months to July, ending 16 quarters of growth in a row.
Few expected it to dazzle, after trading figures leaked in May revealed year-on-year double-digit sales decreases in Somerfield stores.
But today’s 1% figure should be put in perspective. Trading across the sector can only be described as flat in a particularly testing economic climate. Asda recently sustained a 0.4% fall in like-for-likes, while Tesco, Morrisons and Sainsbury’s posted only marginal gains.
Taking Somerfield out of the equation, like-for-likes were up 4.1%, The Co-op says, and by 2.5% in rebranded stores. That’s well ahead of the industry.
And don’t forget: that Somerfield deal marked the UK’s biggest acquisition in terms of store numbers. The Co-op took on around 700 stores after the disposals required for a ‘yes’ from regulators and has been converting them to its fascia at 25 a week. That’s no mean feat.
It’s on track to finish by early next year and, at the same time, has increased food profits by almost 13% to just shy of £170m in the past six months. Contrast that with the series of profits warnings Morrisons issued after swallowing Safeway.
Critics of The Co-op and its chief executive, Peter Marks, should wait for the dust to settle before writing the Somerfield combination off.
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