LONDON (FNS) -- Argyll Group, the third-largest food retailer in the United Kingdom, has sold 151 of its smaller stores to five members of Spar, a European wholesaler cooperative. The sale, for which Argyll received about $30.5 million (19.7 million pounds at current exchange rate), includes 123 of Argyll's Lo-Cost discount stores and 28 of its Presto stores.
All the stores have fewer than 4,000 square feet; the average size is 2,100 square feet.
Argyll, which also operates conventional supermarkets under the Safeway banner, has been reviewing the future of its Lo-Cost chain since May. At that time the Lo-Cost division's poor performance pulled down profits at Argyll's non-Safeway sector by about 20%.
Argyll said 144 Lo-Cost stores will remain after the sale. The company will continue to evaluate them. Retail analysts said they expect Argyll eventually to sell most of the stores.
The Spar wholesalers buying the 151 stores serve England and Wales. Spar said the purchase will add $232 million to its annual sales in the United Kingdom, which previously totaled about $1.86 billion.
The wholesalers included in the deal are A.F. Blakemore & Son, which bought 62 stores; Alfred Jones, 14 stores; Appleby Westward Group, eight stores; Capper & Co., 29 stores, and James Hall & Co., 38 stores.
Peter Blakemore, managing director of A.F. Blakemore and chairman of Spar, said that in size and location, the stores fit in Spar's convenience-store portfolio.
The purchase also demonstrates the Spar wholesalers' confidence in the convenience store format in the United Kingdom, Blakemore said.
