The Co-op is to triple the number of its franchise stores over the next three years as part of a new food strategy outlined by new Group CEO Shirine Khoury-Haq.
Khoury-Haq, who was confirmed as CEO in August, unveiled the new plans today as the society reported flat sales of £5.6bn for the 26 weeks to 2 July and an 84% fall in pre-tax profits to £7m.
The strategy has three main focuses – channels and partnerships, value and range, and loyalty.
In terms of channels, Co-op said it planned to boost scale with a capital-light expansion programme through its e-commerce and franchise operations and key strategic partnerships. There are currently 43 Co-op franchise stores across the UK and Khoury-Haq has set a target of 150 with three years.
On pricing, Co-op is investing £37m to reduce the price of 120 key convenience lines such as orange juice, pizza, wine, fruit and salads. These will be held at the lower prices until the new year. Last month, The Grocer revealed the Co-op had warned suppliers to expect delistings as part of a major range review. Today Khoury-Haq confirmed this was likely to see a 21% reduction in the number of SKUs sold by the society.
Finally, the retailer said it aimed to improve Co-op member offers to drive loyalty and grow shopping baskets and trips.
“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,” said Khoury-Haq. “We’ve grown our own business to operate more than 2,500 Co-op operated stores, have built a nationwide franchise platform and serve almost 5,000 independent convenience stores through our wholesale arm.
“As we face into a cost of living crisis we are determined to make life fairer for our members, customers and communities in these extraordinary times and lowering prices for shoppers is the first step in our strategy.”
Co-op Food MD Matt Hood added: “We are one of the most frequently visited food retailers, with over 16 million shoppers each week. This inflation-beating multimillion-pound investment will reduce prices on everyday items at a time when consumers face even higher household bills and kickstarts our new-look food strategy to extend our scale and reach through capital light opportunities, focusing on launching new stores with great franchise partners.”
1 Readers' comment