A major expansion programme involving a bid for Somerfield coupled with a three-year £1.5bn investment scheme to transform the existing business is being planned by the revitalised Co-operative Group.

The group is Britain’s biggest farmer, fifthlargest food retailer and number three in the pharmacy league table.

The flagship business of the movement is believed to have indicated it is willing to offer around £1.9bn for the 900-strong Somerfield supermarket chain, short of the £2bn-£2.5bn price tag placed on the group, as reported in the Daily Telegraph and the Financial Times.

Peter Marks, chief executive, has that the Co-op is conducting due diligence at Somerfield, which is owned by entrepreneur Robert Tchenguiz and the private equity groups Apax and Barclays Capital, but cautioned that it was 'still early days.'