The Co-operative Group is to make “a number of redundancies” in its food business next month as it battles increased competition from the big four.
Seven senior managers have already been made redundant as part of a review “focused on driving efficiency and removing duplication of tasks and cost”, and a review is currently being carried out on field support teams in both retail operations and logistics at its New Century House HQ in Manchester. Customer-facing roles in stores and depots are unaffected.
In a memo leaked to the media, including The Grocer, this week, acting food CEO Sean Toal admitted the society was “going through a difficult and challenging period” and was facing “extreme challenges in a market where customers are spending less”.
“Competition in the market, particularly among the big four food retailers and others, has increased significantly in response to a growing demand for better pricing and more value-led offers,” he added. “It is no exaggeration to say that our business is experiencing some of its toughest trading conditions in recent history.”
The review will remove much of the duplication created when the society bought Somerfield three years ago. However, it would also “ensure our cost base is better aligned with our sales and profits”, said Toal.
Earlier this month, the Co-op Group revealed like-for-like food sales fell 0.2% in the 13 weeks to 31 December, although they had increased by 3.1% in the four weeks leading up to Christmas.