The chain admitted it had failed to run the 384 Kwik Save stores alongside the core business and that it had incurred substantial losses totalling millions of pounds.
A consortium took over Somerfield last year in a £1.1bn deal. Its new owners now plan to focus on becoming the UK’s leading convenience and local food retailer and will convert 102 Kwik Save stores to the Somerfield fascia, to create a retail group with more than 1,100 stores.
A new company - Back to the Future (BTTF) - has been set up by a consortium of retail executives specifically to operate Kwik Save and will buy 171 of the stores, while 77 have been sold to other retailers, thought to include Netto and Aldi.
The remaining 34 stores have been bought by other property investors.
BTTF chief executive Paul Niklas said it would continue to run Kwik Save on a discount strategy and would gradually refresh the store image.
At least 500 jobs will go at Somerfield’s head office in Bristol, with redundancies thought to be at all levels, from managers to office staff. More than 1,800 staff work at the HQ and Somerfield has now started a 90-day consultation with staff.
Somerfield has also announced a number of senior appointments in recent weeks. Paul Mason joins the group as chief executive, while Colin Smith is the new trading and marketing director. John Cleland has been appointed retail director.