Belfast Telegraph

Dozens of jobs to go in Co-op's food aisle

The Co-operative Group is preparing to further slash its food division's workforce, as it seeks to cut costs amid tough trading at its grocery operation.

The mutual business has told its 200-strong food division's property team to expect a restructuring next month, in addition to the 300 redundancies at its headquarters in Manchester unveiled in February.

There is also speculation internally that the group plans to close its Scotland and Northern Ireland office, which employs up to 100 staff in Glasgow, largely in facilities management.

Its food business is not alone in making cuts, as its banking division announced 187 redundancies last week.

The job cuts come at a testing time for Peter Marks, the chief executive of the Co-operative Group, which has grown rapidly over the past three years, including acquiring grocer Somerfield and building society Britannia in 2009.

Its banking division is currently seeking to acquire 632 branches from Lloyds Banking Group. Lloyds will update on the process later this month.

The job cuts in the food property team are part of its Unity Programme. This is the Co-op's project to deliver a more co-ordinated strategy across 4,800 retail trading outlets, including pharmacy, banking and funeral care.

The food division's senior managers have been telling lower-ranked staff not to expect a bonus, as its grocery business did not hit its targets for the year to January 1 2012. This is largely attributed to the weak performance of the former stores of Somerfield, which the Co-op acquired for £1.6bn in March 2009.

According to an internal memo, like-for-like sales at the Co-op's food business are down by 0.59% over the 11 weeks to March 17.

A source cited frustration at the increasing workload, pace of change and questioned the strategic direction from the top for the food business.

A spokeswoman for the mutual business said: "The Co-operative Group has been transformed under the leadership of Peter Marks and next week we will announce our annual results which will show the further progress we have made in spite of the tough consumer downturn."

The Co-op delivered record profits of £414.4m over the year top January 1 2011.