The Co-operative Group is set to play the multiples at their own game by pushing itself as a value retailer.
Speaking exclusively to The Grocer, chief executive Peter Marks said the society known for its social values after last year's high-profile 'Blowin' in the Wind' campaign would now focus advertising on deals.
"The ad was particularly timely when the whole country was on the verge of collapse," Marks said. "It rang a bell but is not something we'd do every year. The ad was to relaunch The Co-operative brand. Now we want to tell the world we are value-driven."
Although not historically known for value, Marks insisted The Co-op was well placed on price, especially against the convenience offerings of rivals such as Tesco Express and Sainsbury's Local.
"We are very competitive and have a promotional programme that changes every three weeks," he said. "We have also increased the number of deals on offer in volume and variety."
Marks said the focus on value was a direct result of the society's £1.57bn acquisition of Somerfield, which was finalised last March.
"When we bought Somerfield we said we'd pass on to consumers the savings generated from scale. We've done exactly that and at Christmas we did a £200m promotional package. We will continue this activity this year. When you double your volume business, you expect the benefits to come through."
The Co-op this week reported a 66% hike in full-year food sales to £7.5bn and a 31% rise in food profits to £286m. Like-for-like food sales rose 5.5%.
The Somerfield deal and the society's merger with Britannia Building Society last August helped boost group sales by 31% to £13.7bn and group profits by 20% to £473m.
But Marks warned 2010 would be tough: "The economic recovery is fragile and there's massive consumer uncertainty. This year will be difficult for all retailers and a particularly tough year for us with the integration to finish off."
Speaking exclusively to The Grocer, chief executive Peter Marks said the society known for its social values after last year's high-profile 'Blowin' in the Wind' campaign would now focus advertising on deals.
"The ad was particularly timely when the whole country was on the verge of collapse," Marks said. "It rang a bell but is not something we'd do every year. The ad was to relaunch The Co-operative brand. Now we want to tell the world we are value-driven."
Although not historically known for value, Marks insisted The Co-op was well placed on price, especially against the convenience offerings of rivals such as Tesco Express and Sainsbury's Local.
"We are very competitive and have a promotional programme that changes every three weeks," he said. "We have also increased the number of deals on offer in volume and variety."
Marks said the focus on value was a direct result of the society's £1.57bn acquisition of Somerfield, which was finalised last March.
"When we bought Somerfield we said we'd pass on to consumers the savings generated from scale. We've done exactly that and at Christmas we did a £200m promotional package. We will continue this activity this year. When you double your volume business, you expect the benefits to come through."
The Co-op this week reported a 66% hike in full-year food sales to £7.5bn and a 31% rise in food profits to £286m. Like-for-like food sales rose 5.5%.
The Somerfield deal and the society's merger with Britannia Building Society last August helped boost group sales by 31% to £13.7bn and group profits by 20% to £473m.
But Marks warned 2010 would be tough: "The economic recovery is fragile and there's massive consumer uncertainty. This year will be difficult for all retailers and a particularly tough year for us with the integration to finish off."
No comments yet