The supermarket chain Somerfield has shelved plans to sell its struggling Kwik Save division.

The company acquired 900 Kwik Save stores in 1998, and decided to put 350 of them up for sale last year.

But none of the offers it received was thought to be satisfactory and Somerfield has now changed its mind.

The stores are estimated to be worth £215m, but it is believed offers were in the region of £75m - £90m.

Somerfield is also withdrawing from sale 41 of its own brand shops.

It decided earlier this year to sell up to 140 of its bigger stores in an attempt to refocus the business as a neighbourhood retailer.

But 57 of those were taken off the market because no suitable offers had been received. Now the remaining stores will stay in the Somerfield portfolio.

The changes in policy are the first moves made by the new chief executive, Alan Smith.

He took over Somerfield, Britain's fifth largest supermarket chain, after David Simons was ousted last month.

The purchase of the Kwik Save stores has caused problems for Somerfield.

Profits warnings

Many analysts thought the £1.25bn price tag was too high.

And poor performance at the Kwik Save outlets dragged down the parent company.

It has issued a series of profits warnings and pre-tax earnings in the half-year to 6 November fell 47% to £60m.

Mr Smith said: "The Kwik Save stores still produce a contribution despite the sales declines of the last two years. These stores can be managed effectively in the future."

Explaining his decision to get the best value out of the chain by running it, he added: "A business that is unloved cannot succeed."