UK retail group Somerfield has reported higher first-half profits and sales, helped by store refits.
Go deeper with GlobalData
The company, which owns supermarket chains Somerfield and Kwik Save, reported profit before tax and exceptional items of £15.5m (US$28.4m) for the 28 weeks to 8 November, compared to £6.4m a year earlier.
First-half operating profit before exceptional items was £17.2m, compared with £7.9m in the year-ago period.
Like-for-like sales edged up 0.9% on a group basis. Like-for-like sales at Somerfield were up 2.2%, while those at Kwik Save slid 1.0%.
“The pace of recovery is improving as we continue to implement the group strategy. The investment programme is renewing our stores and we continue to develop our customer offer,” said executive chairman John von Spreckelsen.
“While both estates still require significant investment, particularly Kwik Save, I am pleased to report that operating profit has more than doubled in the period despite incurring dual distribution costs associated with the integration of the new North West depot…We expect the group’s performance to continue to be in line with the board’s expectations,” Von Spreckelsen added.
The like-for-like sales growth at Somerfield was mainly attributed to stores that had benefited from capital investment. Around 25% of the total Somerfield estate has so far been transformed to the company’s new format.
During the first-half period, 30 new concept stores were opened and nine Kwik Save stores were converted to the new Somerfield format. These 39 concept stores, including the nine Kwik Save conversions, are experiencing like-for-like sales growth of approximately 20% on average, the company said. In the second half of the year, the retailer plans to convert a further 30 stores.
Somerfield also gave a trading update. For the first ten weeks of the second half, to 17 January, group like-for-like sales were up 1.5%. Like-for-like sales at Somerfield stores rose 2.3%, while those at Kwik Save edged up 0.4%.
