The Co-op sells 298 stores for £117m

Convenience retailer The Co-op Group is to offload nearly 300 of its smaller food stores as it looks to strengthen its estate of larger convenience stores.

The Co-op is to offload nearly 300 of its smaller food stores as it looks to strengthen its estate of larger convenience stores

The retailer has agreed to sell 298 stores – amounting to around 10% of its total estate – to McColls Retail Group for £117m, saying it will reinvest the proceeds in its plan to open 100 stores this year.

The stores being sold, which are all under 1,700 sq. ft, were unlikely to offer a “sufficiently compelling own-brand offer” or drive sustainable growth for The Co-op’s members, CEO Steve Murrells said, and as such the move was in line with its current strategy.

“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,” he said.

The group currently operates around 3,750 outlets nationwide, and has opened 200 new stores in the last two years. In May it agreed the sales of 36 stores that were acquired in its 2008 takeover of Somerfield to The Food Retailer Group, part of the Hilco Group.

In March, the retailer overhauled its wine portfolio and remerchandised the BWS aisles in a major review which BWS boss Simon Cairns said has resulted in strong uplift in wine sales. The category already overtrades significantly, acting as a ‘halo category’ he noted, but there were opportunities that could be further developed, he said, including wine and meal deals, gifting and more convenience-friendly wine formats.

In the latest figures from KantarWorldpanel, The Co-op saw sales growth of 2.0%, which head of retail and consumer insight  Fraser McKevitt said was a sign it has “cemented its recent revival”. It currently has a market share of the grocery market of around 6.2%.