Good results from the Co-Op
20 October 2016
The Co-Op continue their rich vein of form with another great showing on Kantar, their work in convenience is setting the standard for the market in fairness too.
The market for c-stores continues to grow apace as customers continue to use the channel for their little / often shops, improved food to go offerings also help, as do the better locations for stores.
Tesco Express posted solid growth in their figures at the half year, with another like for like sales growth. However store standards in recent weeks haven't been world class by any stretch. The removal of the click/collect charge for parcels by Tesco will aid the Express chain in terms of footfall.
However it is intensive for stores to fulfil, more parcels means more deliveries to process for store colleagues.
Sainsbury's Local continue to trade well and their locations always look to be well thought out. A link with Euro Garages for them to continue their work with petrol stations and the standalone shop model.
The Co-Operative have really continued to motor along since they decided their strategy was to be convenience and focusing upon getting that right, relentlessly, alongside price work and also sharpening up the own label (twice) too.
The clover logo of course is now everywhere; it's a very impressive roll out across the store estate. Quite striking and the issue is the older 'green' stores now look tired versus the new Blue / Charcoal exterior.
The logo on pack is sharp and improved quality of product can help allay any fears there may be about the logo carrying any connotations of the darker, 1990 era of the Co-Op.
Those were overpriced, poor quality food and poor quality shops, long memories indeed to hark back to those days, post Somerfield the chain was struggling but they've reshaped entirely. Selling off stores not suiting their property needs and harmonising the estate - a recent sale of the smaller outlets to McColl's highlights the format they are most comfortable with.
The wider chain has seen numerous improvements in own label with 'Loved by Us' winning lots of praise before the change to the core Co-Op label.
The premium tier as Truly Irresistible was well executed across the store and always performed at Christmas, the recent shift to 'Irresistible' has added a real halo to the brand.
A bronze effect on the packaging and great highlighting in store will lead to stronger returns on margin for the premium ranges - especially as we approach Christmas. Very important for convenience to be there over the festive period.
It is difficult though, customers tend to do a big shop more than ever at Christmas, so what place convenience? Well, it's more than the Gravy (mum's forgotten) or indeed Milk to ensure the 12 pints they have bought don't run out with the stores closed for just one day.
It's about inspiration, good ranges and the attempt to get the customer to buy something for the evening meal, additions to the Christmas eve feast or more gifting opportunities. Whilst the customer is in the store - they need more reasons to purchase. Not just what they came in to the store for....
Irresistible - you deserve it with a 3 for 2 deal across the ranges, highlighting the relaunch too. Very sharp offer and literally polar opposite to the Co-Op some 4/5 years back.
Seasonal is another one that's difficult to get right in convenience but it's vitally important. Especially for the all important distress purchase - quick we've forgotten the Pumpkins etc.
Co-Op have delivered one of their best seasonal packages for an age with their Halloween range of products. Packaging is very sharp and it's a range that will stretch spend too, very impressive from that viewpoint.
Stretching spend and reasons to a) spend more and b) return is why the Co-Operative are succeeding in today's market.
Not to mention better stores and finally making the most of some of their superb locations with a strong all round offer.
From the Grocery Insight newsletter archive, first sent to subscribers on 20 October 2016. Steve now writes at read.groceryinsight.com. See also the blog archive and briefings.