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Rivals follow Morrisons in taking stores to allow takeover of Somerfield to go ahead
Supermarket chain Co-op has agreed the sale of two store portfolios to Tesco and Waitrose and has completed the sale of 38 stores to Morrisons as part of its planned takeover of Somerfield. But the Co-op still needs to sell a further 60 shops over the next year, taking the total to 126, as ruled by the Office of Fair Trading in October.
The Tesco and Waitrose purchases are due to be announced in January. Tesco is believed to be taking 15 stores and Waitrose 13. It is thought Waitrose and Tesco are paying less per store than the o223.1m for 38 stores that Morrisons paid. ASDA is still in talks for a handful of Co-ops but Sainsbury's is thought to still be considering an offer for a small number of stores. Marks & Spencer has completely halted all new store expansion and has not bid for any of the stores.
Under competition rules, the 2,000-strong Co-op chain must sell 26 stores of the 126 earmarked for sale before it can complete the ???1.6bn purchase of the 800-strong mainly convenience store Somerfield chain. The 26 enforced sales have exchanged: four have been taken by Morrisons, six by Tesco, seven by Irish retailer Musgrave, six by Spar and one by Lidl.
Discount retailers Aldi and Lidl are interested in batches of stores from Co-op. But under competition rules, bids for other stores can only be made once the 'big four' - Tesco, Asda, Sainsbury's and Morrisons - have ruled out their interest. So far Co-op has only agreed 66 store sales and has less than a year to complete the other 60 sales.
Chris Mackaness, director of newly formed retail agent R&C, said: 'Supermarkets are still expanding but they are being more prudent with cash. By buying leasehold stores such as these, supermarkets can save valuable capital. 'They are now being offered sites from developers who had planned residential or office schemes and are having to rethink plans. Supermarkets are being flooded with opportunities,' he said.
Morrisons is in the midst of an expansion plan and has hired agents Rapleys, Rees Richards in Wales and Ryden Partners in Scotland to look for new stores and store extension opportunities. It is searching for stores of between 25,000 sq ft and 80,000 sq ft. Food sales are still growing but experts predict the sector will find it tougher next year. With a flood of space available, supermarkets will be even more choosy in their expansion plans.
The latest British Retail Consortium report said the food and drink sector was the only sector to show sales up on a year ago for the month of November.
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