Somerfield, the Bristol-headquartered retailer, has had a busy 12 months. In early 2006 the company moved to complete the absorption of the Kwik Save acquisition, converting a final 102 former stores to the Somerfield brand.
The company sold off a further 240 to third parties and acknowledged it had not been a success trying to run the line inside the main Somerfield umbrella – indeed it had cost at least £130 million in the four years since it had bought Kwik Save. Some 500 staff will be leaving as a result of this move, leaving the company with 1,000 UK stores and making it a midsize player in this highly competitive market, occupying the fifth position at the moment. The firm sells some 25,000 lines, of which 4,000 are own-brand products. Last December it was bought out by a group of investment companies in a £1.1 billion deal and taken off the stock market. The company’s new ownership has publicly committed to investing heavily in the group to improve performance.
The company has made what it characterises as “good progress” in improving its IT infrastructure to cope with all these changes. For instance, rolling out a new £3.3m electronic till fleet to help cope with chip and pin as well as consolidation of multiple payroll systems into a new single SAP platform, and a new datacomms backbone coming on-stream. It has also brought in Capgemini to continue what it has called a five-year overhaul of its IT operations, to be based on its investment in ERP.
But like many retailers, Somerfield tends to be careful with its money IT-wise. Only earlier this year, for instance, it migrated from the NT4/Exchange 5.5 email server onto Exchange 2003, over two years after Microsoft ceased offering mainstream support for the product.
The company has also had some challenges in the technology field in the past, such as a short-lived excursion into e-commerce, 24-7, that was quickly shut down.
But the company is undeniably investing in its future, with a major internal system to speed up own-product creation via a product development project planner and tracker system that started coming on-stream early last year, replacing its inefficient paper and Access database forerunner.