The CoOp - Going along nicely
9 December 2019
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We are back for the main run in with daily emails from now until Christmas as we keep the retail train moving, there is lots of activity and our minor break was due to our pending image portal (Curated by Grocery Insight) being readied for launch.
This is now all done bar the final clean and polish and we're very excited, please get in touch by replying to this email if you'd like to see it in action and how it will help your business.
Anyway - for this email - we are looking at the Co-Op, an unlisted player but one that continues to perform ever so well on Kantar and building growth on growth, even when selling stores (typically means Kantar dips).
A key reason for this has been consistency, their stores are generally very well presented and standards are maintained by and large in many stores you visit. This is a key challenge for any retailer, but especially convenience retailers who suffer from huge footfall and variable trade based on weather and a huge number of other factors....
Meaning that stores can look like they haven't been filled in a week when in reality, they've had a huge run of customers post a peak time and stores trade at different times, some are lunchtime, others are evening meal and top-up shop.
A key challenge in convenience is ensuring that customers have a reason to visit the store at any time of the day if they go for lunch then can they also find a reason to pop in on the way home?
Key event like Halloween and Christmas are also crucial for the pick up / impulse trade, with the intention that customers may then consider the CoOp as a suitable place to do their shopping, if they didn't shop with the chain already.
Value has been an issue for a number of years with the CoOp, Steve Murrells used to call examples of 'insult pricing' ones that were a key issue for the business.
Any floating shopper who came in would probably go out of the door with exactly what they wanted, not buying anything else on top, a lose-lose situation.
However, the CoOp is not known for being the cheapest in the market, rather value-focused and offering a blend of quality and price = value. There are key deals such as their now-famous Freezer filler deals which has been imitated by numerous other retailers and Super Saver extends to fresh foods too now.
There aren't many examples of insult pricing and the premium tier "truly irresistible" stands well on its own, it isn't the case that price is the most important factor in convenience, quality plays a part, as does convenience in its own right.
As an ethical retailer, CoOp still pushes hard on credentials around Fairtrade, their membership model and being responsible.
However it's not the only message that they trade upon, previously they were pushing hard on fairtrade and little else. It was hard for customers to square the circle between helping the Fairtrade farmers when they were unable to pay their own gas bill for example.
It's important to push on the ethical credentials of the chain but not at the expense of anything else, the blend of value, quality and ethics/responsibility work well.
The loyalty card gives a discount and money back too, so another reason to be part of their 'movement' so to speak.
A huge topic in the sector at the moment is plastic packaging and recycling, huge for consumers and everyone else post Blue Planet. Retailers have been working hard on various areas in-store to reduce packaging, change to recyclable containers and eliminating black plastic as a priority.
The Co-Op has changed the ready meal trays to cardboard to encourage recycling and remove plastic from their range, a difficult task given the numerous stakeholders and consumer impact too.
A notable piece of work in city centre stores was to highlight their partnership with Deliveroo, with numerous products flagged around the store as being suitable for delivery to your home.
Using Deliveroo is second nature to younger customers, particularly those at University e.g. as they'll use the service to eat-out from restaurants. Expanding Deliveroo to physically collect and deliver ready meals and other suitable groceries on a "needs / to go" basis feels like a logical next step for the Co-Op.
Especially as it follows the US model of a 3rd party picking (or certainly fulfilling) the delivery leg, as we see with Publix et al using Instacart for deliveries on a wider scale.
The CoOp delivering would be prohibitive to the service as there's too much cost and complexity, but using Deliveroo makes perfect sense to remove the complexity and offer a service to customers.
This relies on the CoOp having a strong ready meal range and being a convenience operator, this is par for the course.
Formerly, it wasn't necessarily the case and this is a sign of how far things have come for the chain and indeed, Deliveroo would encourage further innovation and trials around "freshly produced" and a wider range of products.
Ahead of Christmas; the top-up/forgotten lines will be crucial for customers who think of the CoOp first when they need Oxo / Paxo / Stuffing / Sherry / Foil etc.
Free from is also an area of growth for the market and the CoOp is pushing heavily on this range too, not easy in convenience given space restrictions and the need to offer a fuller range, but they're in the space and this range will prove crucial in the years to come, especially versus discounters.
Don't just listen to me though, the Grocer Gold award says it all for the Co-Op! A retailer doing a lot of the right things in a difficult marketplace with strong competition at every turn.
Especially when you consider discounters, popping up across the country with sites that open 8 am - 10 pm, offering ample car parking and in Aldi notably, their new stores have an end featuring chilled ready meals and Wines for 'meals for tonight'. Alongside a growing food to go offer too.
So competition comes from discounters too, not just the c-store operators.
From the Grocery Insight newsletter archive, first sent to subscribers on 9 December 2019. Steve now writes at read.groceryinsight.com. See also the blog archive and briefings.