Somerfield may have found a suitor at last. After a failed auction attempt, the private equity owners of the UK food retailer, who paid £1.1bn for the company’s equity in late 2005, could now sell out to rival Co-op by next week. If the transaction goes through, the combined company could become a far more serious force in the UK’s crowded supermarket and convenience store sector. Together, Co-op and Somerfield take just over 8 per cent of shoppers’ spending, according to a recent TNS Worldpanel survey. That would put a combined Co-op/Somerfield in fifth place by sales, not far behind a resurgent Wm Morrison.

Supermarket mergers are tough – witness the trouble Morrison had in swallowing Safeway. Somerfield’s owners have already had to lower their price expectations. Co-op, meanwhile, must be hoping for significant synergies in distribution, purchasing and advertising for a chain that would have more than 3,100 outlets. It would be by far the largest convenience store chain in the UK, with special strength in rural areas. Some of Somerfield’s bigger sites could then be sold off to rivals such as Morrison and Asda, which appear to have passed on the entire company in part because they focus on larger stores.