Co-Op - Fair & Square Pricing
23 April 2014
A major criticism of the Co-Operative is their pricing structure which seemingly added around 25% to the core price charged in other outlets.
This meant the Co-Operative was a shop you used only in an emergency, or for the usual 'top up' but with gritted teeth. Store were untidy, queues long and ranging seemed to be everything possible, 1 wide across categories such as Tea / Coffee.
Elements from Somerfield such as SMART have brought standardisation to in store processes, improving availability and waste. That said, execution remains a challenge for all in retail, but particularly the Co-Op (although it has improved).
Launch day of a £100m price investment, zero PoS relating to 'fair & square' prices. Yet Easter PoS remains up.
The egg hunt starts with gardening equipment?
Tremendously disappointing regarding the first store I visited, there is no doubt in retail that HQ can be blamed for a lot of centralised decision making, range, pricing, promotions are their remit.
However, stores have to take accountability and responsibility for not delivering, it's just beyond my understanding how there can be not one piece of PoS on display.
Despite the store opening at 6am (I visited at 8;30am), the Bakery was poor, with dreadful availability at a key trading time.
Execution in store is difficult, with a variable store estate spanning the length and breadth of the country but accepting the unacceptable is never an option.
So, in 'fair & square' price news. Savings are flagged on shelf via PoS and bespoke SELs displaying the previous price and the new price.
I've not yet done analysis on the new pricing versus old and how it now stacks up versus the competition but the price gap has narrowed and it looks to be on headline items - Bread for example has had a good number of products reduced.
There were also reductions on core products within Chilled, Butter / Margarine were targeted.
To further enhance the value proposition, the Co-Operative have launched their first own label Bread, priced at 75p and backed by a 100% money back guarantee, it sits within the core range very nicely indeed.
Price is becoming more and more important as Aldi / Lidl effectively 'reset' the acceptable price for quality products. The Co-Operative have work to do on price perception but initiatives like this are always going to help the value proposition.
Grocery Insight offer a range of services to retailers, suppliers and investors. Looking at categories across retail to shape an upcoming range review, looking at your stores undercover to highlight areas for improvement or to provide some 'expert' insight into a project or proposal.
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From the Grocery Insight newsletter archive, first sent to subscribers on 23 April 2014. Steve now writes at read.groceryinsight.com. See also the blog archive and briefings.