Co-op to sell 298 small stores to McColl's Retail Group
The Co-operative Group has agreed to divest 298 smaller Food stores to McColl’s Retail Group for £117m.
The sale is subject to approval from the shareholders from both the companies. The Co-operative noted that all the stores will continue to trade immediately after handover and all the employees will be transferred to McColl’s as per the regulations of TUPE (Transfer of Undertakings (Protection of Employment) Regulations).
When the deal is completed, it will leave the Co-operative with about 2450 stores after the sale of 100 properties including 36 stores to Hilco in May.
Recently, The Co-operative Group hired Rothschild bank to find prospective parties to buy 300 of its shops, which correspond to about 10% of its estate. The company wants to limit its debt and expand and modernise its convenience store business.
The Co-operative Group is selling the stores as part of its strategy to refocus on its store estate on convenience and own-brand-led shopping experience.
Co-op Food has a clearly defined food strategy under which it is focused on delivering a convenient shopping experience to millions of customers every day. After gaining a growth rate of about 4% in April in convenience estate, it further wants to strengthen from this autumn.
Proceeds from the sale of the 298 stores will be re-invested to deliver Co-op’s strategy which has made it one of the most visited food stores in the past year.
Co-op Food CEO Steve Murrells said: “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.
“The proceeds will be re-invested to drive sustainable growth for our members and I’m delighted that all 3,808 colleagues will transfer to McColl’s on the same terms and conditions.”