J H Mills opened a small family
grocery store in 1900, in Bristol. By 1950, when his business became
a limited company, he owned 12 shops. A Bristol finance house became
a major shareholder, two more shops were opened and the name was
changed to Gateway. The stores were then converted to self-service
In 1964 Frank Dee took over the wholesaler part of the original
Mills company, resulting in 70 'Frank Dee' supermarkets being opened
in the north of England. In 1970, Frank Dee was taken over by Linfood
Holdings Group, and in 1977 Gateway too joined the same group, such
that there were 100 Gateway shops across the country. In 1983 Linfood
Holdings Group was renamed The Dee Corporation. This continued to
expand with mergers and acquisitions (International stores, Fine
Fare, Carrefour Hypermarkets, Lennons, Keymarkets) over the next
five years. In 1988 The Dee Corporation became The Gateway Corporation.
In 1989 The Gateway Corporation was acquired by Isosceles and in
1990 the first Somerfield store was launched. By 1994 Gateway Foodmarkets
became Somerfield Stores. In 1996 Somerfield plc became independent
of Isosceles and was floated on the London Stock Exchange. In 1998,
a merger between Somerfield plc and Kwik Save Group plc was announced.
There was a lot of activity in 1999 including the launch of a home
shopping division called Somerfield Direct Ltd with a 24/7 identity
available to customers via catalogue, internet and digital television.
Also Somerfield plc announced a reorganisation of the company into
three separate business units - Somerfield Stores, Kwik Save Stores
and Somerfield Convenience Stores. Somerfield plc invested £100
million to modernise the group's distribution network creating its
first regional distribution centre. And finally, plans to sell of
500 stores which did not fit the company's new direction.
However, in 2000, after the sale of 36 of its larger stores and
a change of CEO, the decision to sell more stores was withdrawn
by the Board. Also the company was to retain over 700 stores and
the Kwik Save brand. The 24/7 service development was also ceased.
In the financial year ending in April 2000 the group opened two
new stores, converted 51 Kwik Save Stores and 13 Gateway stores
to the Somerfield format, opened 11 new forecourt stores in partnership
with Elf, and refurbished 57 Somerfield stores.
For the financial year ending 29th April 2000 sales were £5.5 billion
compared with £5.9 billion, a decrease of 7.3%, in the previous
year. Operating profits before exceptional items decreased by 57.1%
to £101.1 million and net operating margin declined from 4.0% to
1.8% of turnover. Profit before tax and exceptional items was £70.7
million compared with £218.4 million (down by 68%) of the previous
year. Somerfield plc employs just over 66,000 people, and has a
market capitalisation of £377.6 million.