McColl’s is to buy almost 300 of the Co-op’s smallest Food stores in a deal worth £117m.
The Co-op Group has today 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 298 stores, which are 1,700 sq ft on average, 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 staff will TUPE transfer to McColl’s.
The sale forms part of the Co-op’s plans to refocus its store estate on “a convenience, own-brand led shopping experience”.
Speaking of the off-loaded stores, Steve Murrells, CEO of Co-op Food, said: “They 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.”
Jonathan Miller, McColl’s Chief Executive, said the stores were “profitable, well-invested, and the perfect size for our operating model”. He expects the deal to be “significantly earnings enhancing” for McColl’s shareholders.
Shopworkers’ trade union Usdaw has welcomed assurances from the Co-op that the 3,600 staff affected by the sale will continue to have secure jobs.
John Gorle, National Officer for the union, said: “Usdaw has a good and productive relationship with the Co-op and we will be seeking a similar approach from McColls. In the meantime we are providing our members with the support, advice and representation they require.”
