RETAILER Marks & Spencer is to open Simply Food outlets in the region after acquiring 28 stores from Iceland Foods for £38m.

Iceland stores in the Arndale Centre, Durham City, and in Northallerton's High Street will be turned into Simply Food outlets between June and August this year.

Management and staff at the Iceland stores will be transferred to Marks & Spencer under the same terms and conditions.

Ian Dyson, finance director, said: "We are delighted to have acquired these sites, which will enable us to accelerate the growth of our very popular and profitable Simply Food concept."

The stores will stock 2,000 food lines including ready meals, fresh produce, sandwiches, wine, flowers and basic groceries.

There are currently 143 Simply Food stores in the UK and Ireland, which include 40 franchise stores in railway stations, airports, motorway service stations and petrol station forecourts.

The group said the new stores were all in target areas for the Simply Food brand.

The deal is a significant step in the M&S growth strategy after chief executive Stuart Rose told investors in November that he hoped to add 100 Simply Food stores over the next couple of years, depending on site availability.

Iceland said M&S had made a really outstanding offer for the stores, adding that it planned to target new sites in all the towns affected.

The disposals will leave Iceland with 675 sites, but it pointed out that a sharp revival in its trading performance meant it would still achieve sales substantially higher than those generated from 749 stores a year ago.

Like-for-like sales grew by 16.1 per cent last month and by 14.8 per cent in the final three months of the year.