Somerfield is set for a £20 million makeover, according to chief executive Paul Mason.
The 1,150-strong chain needs a full overhaul on range, price and merchandising in order to get the retailer back on track within two years, he added.
Mason said: “We need to offer the choice of a Tesco or Sainsbury, but also offer Somerfield’s real community presence.
“I can see more market share to go for and we will need to win business from others. We need to compete on price, range and service.”
The £20m will be spent on re-stocking outlets, as well as putting in new shelving and giving stores a fresh lick of paint.
Somerfield has cut its number of lines from 14,000 to 7,000.
Mason is also in the process of launching cheap Simply Value products, and 100 more lines. The premium and healthy-eating ranges will also be updated.
Trials in 15 improved stores have proved encouraging - with underlying sales growth in the “double digits”.
Mason said: “The challenge is can I do it in 1000 stores? This is about creating a foundation on which to build the brand.”
Somerfield has paid off 20 per cent of its £1.4 billion debt in 10 months, and is on track track to increase its profits by 50 per cent this year.
Mason said sales were expected to be about £4bn in the year to April 2007.
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