A method in a storage system reads blocks having both physical addresses and logical addresses in the storage system from a first set of locations in non-volatile storage to a cache memory and determines the level of data fragmentation in the non-volatile storage. If the level of data fragmentation exceeds a threshold level, the cache memory is marked and the blocks are written to physically sequential locations with new physical addresses in the non-volatile storage at a data consistency point without changing the logical addresses of the blocks.