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Co-op unloads 298 stores to McColl's Retail Group for £117m

Published:  14 July, 2016

The Co-op has announced it is selling 298 of its smaller food stores to the McColl's Retail Group for £117 million.

The hand over of the stores is expected to be completed by November 2016.

The sale of the stores is part of a larger strategy to further focus on the convenience sector and further develop own-brand product lines. The Co-op has opened nearly 200 new stores and is looking to add an addtional 100 new sites this year.

"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," said Steve Murrells, the chief executive of Co-op Food.

The company began working to refocus the chain of stores over a year ago and the work seems to be paying off.

Fraser McKevitt, the head of retail and consumer insighst at Kantar Worldpanel, in his latest report on the grocery sector covering the 12 weeks ending on 19 June 2016, praised the Co-op's performance. "It's been a good period for the smaller retailers. Co-op's growth of 2.0% has cemented its recent revival, heralding a full year of increasing sales," said McKevitt.

The results the retailer has been able to achieve particularly given the climate for many in the sector are impressive.  With the increased competition for market share following the growth of discounters Aldi and Lidl, growth amongst the larger retailers has been challenging.

In an exclusive interview with Harpers, at the recent Co-op summer wine tasting, Simon Cairns, the category manager for beer, wines and spirits at the Co-operative, said the rise in convenience retailing has been a great opportunity because consumer shopping habits are changing.

"A lot of this is a fundamental change in shopper habits and shopper attitudes, and convenience as a channel is becoming much more of people's regular weekly routine," said Cairns.

In recognition of the retailer's hard work and that of its wine buying team, The Co-op was awarded Convenience Store Chain of the Year at the International Wine Challenge 2016.