The last two years have seen accelerated consolidation in the c-store market and co-ops have led the way.
Most aggressive is the Co-operative Group, which kicked off its shopping spree in April 2002 with the acquisition of Williams Family Foodstores’ chain of seven stores across east Yorkshire. A month later it bought GT Smith’s 13 west Yorkshire stores before pulling off the big one, the acquisition of Alldays in November 2002, a move that boosted store numbers by 637.
It wasn’t content to stop there: in July 2003, it added Balfour, a chain of 76 c-stores and 35 CTNs, and this May it bought 64-strong c-store chain Conveco. Combined revenues from these purchases are estimated to approach £650m.
Other societies following their lead are United Co-operatives and Scotmid. In July, United bagged the 12-store Cheers chain. This was followed a month later by 19-store chain Leathley’s Quality Fare. And further deals are in the pipeline, says CEO Peter Marks, who announced a £100m warchest to spend on acquisitions back in April.
Scotmid has been almost as aggressive, snapping up 13-store Spar chain SCS in July and the 50-store Morning, Noon & Night chain in August.
The co-operative retail movement has always prided itself on its ethical stance.
A core part of its strategy is to channel profits from food sales into fair pay and working conditions for primary suppliers through selling fairly traded products. It does a pretty impressive job of it, the Co-operative Group leading the way in terms of the amount of own label fairly traded goods it stocks. It launched its first line in 1999 and now has more than 48. By 2005 it aims to reach 70. It switched all its own label chocolate to fairly traded versions in 2002 and converted all own label coffee to fairly traded lines in November last year.
It supports more than just fair trade. After publishing its Shopping With Attitude report in May, the Co-operative Group established an expert panel to improve ethical standards of own label products. In addition to working on environmentally friendly packaging, it is looking at reducing salt, fat and sugar in processed foods, eliminating unwanted additives and toxins and extending its clear labelling system from own label to branded goods.
Oxford, Swindon & Gloucester Co-op has tackled the healthy eating debate by launching its Honest to Goodness campaign to persuade children to eat healthily.
Co-operative food retailers have never been slow to test ideas.
The Co-operative Group, for instance, was the first UK retailer to include Braille on labelling for medicine and vitamins back in March 2001.
It has been working on the technology ever since, expanding its Braille-packaged range in July to include more than 300 products such as beer and ready meals.
It also signed up to the Guide Dogs’ High Street Charter at the same time, committing itself to improve services overall for blind and partially sighted people.
And in 2002 it did its bit for the environment by launching Britain’s first fully degradable carrier bag.
Meanwhile, United Co-operatives has been busy inventing novel ways of combating retail crime.
It was the first retailer in the UK to trial white noise to deter burglars, introducing the system at four convenience stores in March 2002.
The idea is to confront burglars with an unbearable barrier of sound through an internal siren that is triggered by an intruder alarm. It has also teamed up with instore media provider DMX Music to launch a new radio station called Co-op Radio.Hi-tech
Asked which retailers are at the cutting edge of technology, shoppers tend to put the largest multiples at the top of the list.
Yet co-ops can be just as innovative. One society at the forefront of development is Oxford, Swindon & Gloucester Co-op, which became the first supermarket to incorporate plasma screens advertising products, promotions, news and sport into shop floors in November 2002. It introduced self-service check-out lanes at the same time, allowing customers to scan and pay for goods by themselves. Price verification and shelf-high units followed in May 2003, allowing shoppers to scan products to confirm their price. And this summer, OS&G Co-op launched trials of a fingerprint recognition payment system and is also looking at electronic shelf edge labelling.
Co-ops have also spent a huge amount tackling availability and wastage. In May 2002, United Co-operatives rolled out a category management tool enabling individual stores to download tailor-made planograms from its intranet.
Until then, stores used single planograms for whole fascias. The system, designed by software group JDA, can also be used for calculating sales-to-space performance and constantly updates promotional data.