The Co-op Group has agreed the sale of 298 of its smaller Food stores as part of its strategy of refocusing its store estate on a convenience, own-brand led shopping experience.
The sale of the stores, which are 1,700 sq ft on average to McColl’s Retail Group plc (McColl’s) for £117m, is subject to approval from the CMA and McColl’s shareholders. All stores will continue to trade immediately after handover (expected from November 2016) and all colleagues will TUPE transfer to McColl’s.
Co-op Food has a clearly defined food strategy, focused on delivering a compelling and convenient shopping experience to millions of customers and members every day. The strategy, which saw the Co-op deliver like-for-like sales growth in its convenience estate of 4% in the year to April, will be further strengthened from this autumn when the Co-op’s new member offer goes live, rewarding Co-op members for the own-brand trade.
The sale proceeds will be re-invested to further deliver the Co-op’s strategy, which over the past 12 months has seen the Co-op become the most frequently visited food retailer in the UK. In the last two years The Co-op has opened close to 200 new stores and in 2016 is actively pursuing 100 new store acquisitions.
Steve Murrells, CEO of Co-op Food, said: “The Co-op Food business continues to move forward with a clear momentum and purpose to deliver a compelling and convenient shopping experience for our millions of customers and members. “Today’s announcement is completely in line with our strategy, as these stores did not allow us to provide a sufficiently compelling own-brand offer for our members going forwards. The proceeds will be re-invested to drive sustainable growth for our members and I’m delighted that all 3,808 colleagues will transfer to McColl’s on the same terms and conditions.”