At first glance, you’d be forgiven for thinking Co-op’s latest move on Member Prices was a ‘me too’. This week, it announced a £70m investment in cutting prices through its loyalty scheme.
It could easily get lost in a sea of pricing commitments and loyalty-only prices, kicked off by Tesco’s Clubcard Prices and since imitated by Morrisons and Sainsbury’s – the latter of which would have scooped a win in our Grocer 33 pricing survey this week with Nectar Prices.
But this is different. As one industry source puts it, this is “a massive investment for a convenience retailer”. And unlike other loyalty prices, these offers aren’t subject to change. These are permanent discounts on 180 lines that are bought most frequently – including essentials such as milk, eggs and bread. It shrewdly positions Co-op as a convenience operator that cares about everyday value.
That is a crucial message at a time of growing scrutiny around prices. The CMA investigation may have found no evidence of profiteering in grocery – and Which? may have been lambasted for its not-so-shocking findings that convenience is more expensive earlier this year – but these messages are seeping into public consciousness. So if Co-op can prove it’s not resting on its laurels on pricing, that can only be a PR win.
This now throws down the gauntlet to other convenience operators. Co-op is benchmarking itself against Tesco and Sainsbury’s convenience stores – and it’s keen to highlight where it has a price advantage. It’s 15p cheaper than both on a six-pack of medium free-range eggs, for example. It’s a small amount, but enough to send a powerful message.
No doubt it will inspire the mults to review pricing policy in their convenience estates, which can be patchy. While Clubcard Prices are available across Tesco Express stores, Nectar Prices are not in Sainsbury’s Local branches.
That Morrisons rolled out its budget Savers range across its c-stores last month shows the growing importance of value in convenience. On this front, Co-op has taken the lead. Your move, Tesco and Sainsbury’s.