A major rebranding to the created Somerfield brand started in 1990, and in 1998 the company purchased the Kwik Save chain of discount food stores.

Gateway Foodmarkets was taken over by Linfood Holdings, a consortium which already owned the Frank Dee Supermarkets which operated over the north and east of England.

Alec Monk, chief executive of the Dee Corporation, having escaped a takeover bid from Argyll Foods in 1981,[7] decided to create his own supermarket empire.

[8] When Isosceles, a newly created financial group led by David Smith and backed by several big investment institutions, bid successfully for Gateway in 1989 and took the company private, the plan was to restructure the business and refocus it on what were called "middle ground" outlets, falling between the larger out of town superstores and smaller, inner-city neighbourhood shops; the average size of the stores was between 5,000 sq ft (460 m2) and 10,000 sq ft (930 m2).

The promoters of the Isosceles bid believed that, after this disposal and extensive restructuring of the rest of the portfolio, Gateway could become a viable competitor; the intention was to re-float the company on the stock market within three to five years.

In the following year, a new chief executive, Bob Willett, was appointed and a decision was taken to rebrand the company's operations as Somerfield after a successful pilot scheme in 1990 with a new store and the first Somerfield store in the country being built in Burnham on Sea, Somerset, and the company then built its success upon the new brand alongside the existing Gateway and Food Giant chains.

[10] Questions remained about whether, at a time of intense competition both from discounters and from the larger chains, Somerfield could generate adequate growth in sales and profits.

[13] The original plan to transfer all Kwik Save stores to the Somerfield branding was quickly abandoned after it became clear that many outlets were not suitable for conversion, either due to size or location.

It was clear that more than a hundred Somerfield and Kwik Save stores were within a mile of each other and directly competing: also customers were switching from high street to out of town shopping.

As a call centre operated service, customers would telephone the company to order Somerfield produce, which would be delivered direct from the warehouse.

[16] While other home shopping services were providing internet ordering, at this point Somerfield Direct was a catalogue and call-centre operation, chief executive Simons expressing the view that "Mrs Smith in Stockport is more likely to use a handy catalogue from her supermarket than surf the Net in search for Fido's dog food".

[19] However, Somerfield suffered large losses in 2000, its home shopping venture was described as an "ill-fated foray", and development was halted that June.

[18][20] John von Spreckelsen, former chief executive of convenience food retailer Budgens, was brought in as chairman in April 2000.

[21] The new strategy was to keep Somerfield and Kwik Save as separate businesses, while sharing common services in such areas as information technology and corporate finance.

By mid-2002 – halfway through what was seen as a five-year recovery programme – the company announced a return to the black, and dividends were resumed after a two-year break, although the positioning issues remained unsolved.

[28] After the group was taken over, it was reported that the new owners found the Kwik Save chain was losing £40m per year, effectively cancelling out around 40% of the profits generated by the Somerfield division.

This deal included stores in Blackheath in south-east London, Broughty Ferry in Dundee, and Petersfield and Alton in Hampshire.

[33] Having bought 140 Texaco petrol stations in 2007, Somerfield tripled the size of some of their shops, using a similar format to its convenience stores.

[34] On 16 July 2008, it was announced that Somerfield would be acquired by the Co-operative Group for £1.57 billion, subject to approval from the Office of Fair Trading.

[35] The build-up to this announcement began in late 2007, when the parent private equity consortium, that had acquired Somerfield in December 2005, put the chain up for sale.

[36][37][38] On 24 June, a Thomson Reuters newswire reported sources indicating that the Co-operative Group's acquisition of Somerfield could be finalised at the start of July, in a final deal worth £1.7 billion.

[41] In July 2008, the Co-operative Group announced a deal to purchase Somerfield for £1.57 billion, creating the fifth largest supermarket chain in the UK.

The supermarket sought to cancel the contract due to its illegality due to deception, but the Court of Appeal ruled in 2012 that the misrepresentations in ParkingEye's process did not justify termination of the contract, noting that earlier action requesting ParkingEye to revise its debt material would have resolved the situation.

The Somerfield shop also appeared on BBC's Top Gear, during an interview between actor Simon Pegg and host Jeremy Clarkson.

[47] Wright also made an amateur film called Dead Right that had scenes in the same store which is featured on the bonus DVD editions of Hot Fuzz.

A store under its Gateway name featured briefly in the 1990 Christmas Special of Only Fools and Horses ("Rodney Come Home"), in which the store can be seen behind the main characters Del Boy and Uncle Albert as they travel up an escalator to reach the top floor of a shopping precinct, so Del Boy can sell a set of dolls that wet themselves and sing a lullaby in Chinese, while Albert acts as his "Lookout" (for police officers).

In the coming of age play and film Beautiful Thing written by Jonathan Harvey, the main character Jamie asks Tony (the new-age lover of his mother Sandra) where they met, to which he responds "Gateways".