Battling supermarket chain Somerfield today reported a spurt in first-quarter sales and said its next goal was to move back into the black.
Somerfield, which has seen troubled times since it took over budget retailer Kwik Save three years ago, launched a five-year recovery plan last May.
Chairman John von Spreckelsen – who joined just over a year ago from rival Budgens – told shareholders at today’s annual general meeting that the recovery was progressing “in line with the board’s expectations”.
Like-for-like sales during the first quarter at Somerfield-branded stores were up 4.2%, while Kwik Save reported an improvement of 3.5% during the same period – the 16 weeks to 18 August. Overall, group like-for-like sales were up 3.9%.
Von Spreckelsen said: “The sales declines have been stemmed within both fascias and we have moved the group into modest sales growth.”
He added that the board was therefore now “turning our attention” to group profitability, although he conceded it would take “some time to reach more normal levels”.
Earlier this year, Bristol-based Somerfield reported a full year loss of £13.1m, a slight narrowing on last year’s loss of £14.5m.
Turnover was £4.61bn, down from £5.47bn the previous year.
As part of its recovery plan, the group has already refitted 12 Somerfield stores this year and intends to complete another 15 to 20 by April 2002.
The grocer is also looking to expand its City Fresh convenience store format – it currently has seven City Fresh stores, but von Spreckelsen said the brand represented “a major opportunity”.
Despite von Spreckelsen’s confidence, he warned that trading conditions “remain highly competitive in the UK food retailing sector”.
The group’s shares slipped 5%, or 6p, to 110p after the update.
EGi News 19/09/01
