UK retailer Somerfield has attributed the progress made on its turn-around plan to investments in its operational structure, a stronger trading programme and the motivation of its employees.
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Somerfield yesterday (21 January) posted a 3.7% hike in like-for-like sales over the Christmas period.
According to Somerfield retail director John Cleland, the company has seen the acceleration of its like-for-like sales growth continue in the New Year.
“The business has been doing really well for the last two years of its three-year turnaround… Our January like-for-like will be better than our Christmas,” Cleland told just-food.
“Our core business is local retailing, which is where we can differentiate ourselves from the big supermarkets.”
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By GlobalDataWhile Cleland said that the company’s like-for-like growth was outperforming the market, according to figures from IGD, he suggested that these gains would not be reflected in the group’s market share as it has continued to sell off loss-making stores.
Cleland attributed Somerfield’s recent success to three factors. He said the company has increased its promotional spend – with a national television advertising campaign and 40% of Christmas sales coming from promotions; it has improved product availability by 30% through the implementation of a new ordering system; and it has increasingly motivated and engaged employees.
“An independent survey, conducted by the Hay Group, found 81% of our colleagues were satisfied,” Cleland revealed.
This has been achieved through an increased focus on performance and management training and the linking of management rewards to colleague satisfaction, Cleland said.
The company has also focused on clear communication throughout the sale process, with regular updates for staff on The Co-operative Group’s planned acquisition of Somerfield’s stores.
“We made it a priority that none of our colleagues would read what is going on in the newspaper,” Cleland said.
Having gained competition approval, the Co-operative Group is expected to complete its GBP1.6bn (US$2.74bn) acquisition of Somerfield from its private equity owners in the next month.
Commenting on the Co-op deal, Cleland said: “The Co-op is an extremely close fit – we basically serve the same customers in the same kinds of catchment area with the same products. It is a very close match… This is the final home for our business.”
