Co-operative Group’s plan to open 300 stores

Chief Executive Peter Marks has promised to take the Co-operative Group to the next level by revealing the society plans to acquire or build around 300 new food...

Mr Marks marked his three years in charge of the world’s biggest consumer co-operative by insisting the society has no intention of resting on its laurels after its recent ground-breaking acquisition of Somerfield and the merger with Britannia and declared the target now is to take the Movement’s combined grocery market share past the present 7.5 per cent figure.

In an exclusive interview with the News, Mr Marks said the Somerfield capture was “a wonderful acquisition for the Movement” and insisted the disappointing sales figures from acquired stores revealed in the recent interim report was predictable and temporary and said that, after restoring co-operative retailing to the ‘Premier League,’ his ambition now is to push on towards the top of the table.

He said: “A lot has been said about the Somerfield stores losing sales, well of course we are losing sales! 

“We are converting stores at the rate of 24 a week, so when you are doing that you close down stores and you upset customers. So people go to their local store and find it’s shut because we are tearing down the fascia, ripping out the fridges and changing all the products. How can you not lose sales in those circumstances? We are disrupting the business on a large scale.

“That said, the business case we put to the board when we said we wanted to buy Somerfield is being beaten out of sight because the buying and cost synergies that were created from the acquisition are way above what we thought we would achieve. We bought Somerfield for the long term and now have a 7.5 per cent market share. Previously, we had 4.5 per cent and it was declining.”

Mr Marks said independent societies had also benefited from the Somerfield acquisition through CRTG and the brand rollout, but he admitted that integrating the acquired food business had been tough and complex. “It’s the biggest integration project ever undertaken by any food retailer, but we need to do it with pace and it will be completed by the first quarter of 2011, pretty much bang on target,” he said. 

“The important thing is the business as a whole isn’t suffering and profits are continuing to go up. Three years ago, our sales were around £7bn/£8bn; this year we are heading towards £15bn while profits have doubled from around £200 million three years ago and will be over £400m this year. 

“We have a plan to open 300 new food stores in the next three years, so we will need to watch for more acquisition opportunities. There’s two ways businesses can go: backwards or forwards, so we have to continue to go forward with the same momentum as in the past three years.”

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