Alongside the release of its interim results today, Co-op unveiled “a new-look food strategy with a renewed focus on convenience and commitment to offer greater value”.
The first phase of the society’s strategy will see it invest £37m in lowering the price of 120 own-label products in response to the cost-of-living crisis. The reductions are as much 36% on some items, with an average saving of over 13%. Everyday products such as pizza, pasta and burgers to fruit and vegetables have been lowered in price and ‘locked in’ into 2023.
The Co-op also set out an ambition to make it the largest convenience retailer in the UK, with growth plans built on a large-scale network of franchise stores. The capital-light strategy retailer aims to more than treble its existing franchise stores within three years and grow its e-commerce business by building on its tie-ups with Uber Eats, Deliveroo and Amazon to support its own online business.
Meanwhile, the group stated that it was working towards a “smaller and simpler” product range to target key customers and improved Co-op member offers to drive loyalty and basket sizes.
Shirine Khoury-Haq, Co-op CEO, said: “Convenience is one of the fastest growing channels within the grocery market and our refreshed strategy aims to capitalise on the experience we’ve gained in the market over the last decade.”
Matt Hood, who was appointed MD of Co-op Food last week, added: “This inflation-beating multi-million-pound investment will reduce prices on everyday items at a time when consumers face even higher household bills and kick starts our new-look food strategy to extend our scale and reach through capital light opportunities, focusing on launching new stores with great franchise partners.”
NAM Implications:
- A number of retailers are now making consumer-support price-cuts on their own-label essentials.
- Thereby creating a direct threat to brands…
- …especially those that continue to push through CPIs.
- Time for suppliers to make like-with-like price cuts to equivalent brands.
- Or suffer reductions in category share?
