Supermarket shock on the cards

The future of the store is in the balance once more after the Competition Commission ruled that Somerfield's purchase of 14 ex-Safeway supermarkets had led to a reduction in competition in the shopping centres where they are located.

But local circumstances in Littlehampton could lead to traders urging the commission to allow Somerfield to retain the Anchor Springs supermarket, following the major upheaval in the town caused by the closure of Somerfield's other branch at High Street.

Several businesses at the western end of High Street, and in Surrey Street, have reported drops in trade of double-figure percentages since that Somerfield closed in February, at the same time that the Safeway was taken over and converted by its new owner.

That left the town centre with just one supermarket, and led to a big decrease in the number of shoppers visiting the western area.

The feeling among town centre traders is that Littlehampton has already suffered too much from the earlier supermarket shuffle, and that another change could be the straw that breaks the camel's back.

If the sale is confirmed, it is likely to cause concern to former High Street Somerfield staff who transferred to Anchor Springs and could be finding themselves working for yet another employer in less than a year.

John Stevens, chairman of Littlehampton Traders' Partnership, said senior management at Somerfield now appeared to accept that the closure of the High Street store, and the transfer of that business into the Safeway premises, could have been handled better.

"They have had a lot of problems in their new store, but the feedback we are getting from then now is that they are very focussed on making it work, and are showing a genuine commitment to Littlehampton which has really impressed us.

"They have a plan to develop things over the next few years and that is already beginning to take effect.

"It would be a devastating blow to the Littlehampton economy if we had another change of supermarket. We would rather stick with what we have got, and we will be putting that message across to the Competition Commission."

Christopher Clarke, chairman of the commission's inquiry into the Somerfield takeover of a total of 115 former Safeway stores, announced the provisional findings on Tuesday.

He said: "We identified stores in 14 areas where we have provisionally found that the acquisition is expected significantly to reduce competition '” resulting in higher prices, or reductions in quality, range or service.

"We believe the only effective means of restoring competition in these areas is for the identified stores to be sold to a suitable grocery retailer who will offer choice and actively compete in the relevant local markets."

Somerfield has until August 16 to respond to the commission.

The Safeway stores were sold off after the Morrisons supermarket group bought out its rival chain in 2004. Since the High Street Somerfield closed in February, the premises have remained empty, but clothing business Mackays is set to move into the store later this year.

The latest developments in the Somerfield saga were discussed at Tuesday's meeting of the Littlehampton Town Centre Action Group, where members agreed to launch a new marketing campaign for the shopping centre.