SOMERFIELD PLC has reported sluggish sales but growing profits for the six months to November, despite costs related to its cut-price Kwik Save stores.
The retailer said that operating profit hit £32.7m before the negative effects of its conversion of 68 stores to the Somerfield fascia, compared to £17.2m in the previous period.
Like-for-like sales were up by 0.9% at Somerfield and 0.1% at Kwik Save, with group sales topping £2.6bn. But a Christmas trading statement painted a grimmer picture of falling sales since November.
Somerfield blamed it on tough trading conditions and the timing of bank holidays, adding that the market remained “challenging”.
But the results are an improvement on the recent past, when the modernisation of Kwik Save stores turned in low sales and high costs.
The store conversion programme will continue, after Somerfield announced in October that it would take on 114 smaller stores divested by Safeway when it was acquired by Morrisons.