Co-op takes over Somerfield for £1.6 billion
July 27, 2008
Co-op has joined the league of big 4 to become the fifth biggest retailer of food in the UK. It took over Somerfield through the biggest deal of £1.6 billion in the history of food retailers. Co-op will now enjoy market share of 8 per cent with the biggest chain of 3,000 outlets spread all over the UK. Tesco still leads the market with share of 31 per cent, followed by Asda and Sainsbury’s 16 per cent and Morrison’s 11 per cent.
Co-op chief executive Peter Marks, after the acquisition of Somerfield, expects people to start referring retailers as “big five” instead of “big four”. He considers this deal as ‘rocket fuel’ for the group’s growth and is confident of winning out-of-town customers of its rivals who would prefer to shop locally than to waste money for shopping out of town.
Mr. Marks added that time and cost-conscious people will prefer to go down the road and buy from local Co-op shop rather than driving 5 miles to a superstore for shopping. He believes that in terms of convenience market, its growth is much faster than the grocery market.
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