Co-operative Group chief executive Peter Marks has said the retailer hopes to complete its acquisition of rival Somerfield by the summer, as he revealed bumper sales and profits.

The group is conducting due diligence on Somerfield and is understood to have submitted a provisional bid of about£1.7 billion for the 900-store local grocery chain. However, Marks declined to comment on details, such as price or store disposal numbers.

He said: “There is a lot of work to do,” such as negotiating a price and carrying out due diligence. “We would hope to bring this to a conclusion by the summer of this year,” said Marks. Somerfield’s owners are thought to be holding out for a higher price, although they are believed to be willing to accept less than£2 billion.

If the bid is accepted, it is understood that the deal could be completed as early as June. The Co-op’s interest in acquiring Somerfield was first revealed by Retail Week (January 11).

Marks said: “It [Somerfield] is a great strategic fit.” If the Co-op acquired Somerfield, it would increase its market share to about 8 per cent. Somerfield has a 3.6 per cent market share and the UK Co-ops combined have 4.4 per cent.

For the 52 weeks to January 12, Co-operative Group’s trading group operating profit – before significant items and changes in the valuation of investment properties – rose 35.2 per cent to£322.7 million.

Performance was driven by a strong contribution from food. The period includes six months of figures from United Co-operatives, which Co-operative Group merged with last summer.

The Co-operative’s food division’s sales rose 21 per cent to£3.68 billion and pre-tax profits increased 50.5 per cent to a record£139.2 million.

Marks said: “There is no doubt we had a great year in food. It has continued into the first quarter of this year and like-for-likes have been very strong in food.”

He said like-for-like sales had been “in excess of 4 per cent” since January 12.

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