The Co-op says it is focusing on digital as it looks to get closer to customers and members.
The group, which operates in areas from convenience grocery stores to funerals and electricals, today unveiled a plan to create “the Co-op of the future” as it announced full-year results for 2017. The new Co-op would be an efficient and more commercial one, with a greater focus on convenience and relevance, while moves into new markets such as health and money would take an “agile, capital-light, digital-first approach to disrupting markets.”
Group revenues stayed at 2016 levels of £9.5bn, while pre-tax profits of £72m represented a turnaround from losses of £132m in 2016. Like-for-like sales in the food business rose by 3.4%, although total food sales were flat at £7.1bn, reflecting a strategy of closing larger stores.
The Co-op has invested £50m in cutting prices across every day items in its food business, and now plans to grow the business with hundreds of new convenience store openings in the next few years, including 100 in 2018. “We’re going to continue to work through how we will use digital technology to bring our Co-op closer to our customers and members in other ways too,” the group said in its results statement. The Co-op is currently trialling in-aisle payment, which enables shoppers to scan products and complete transactions using their own phone. The trial, which ran first at the Co-op’s support centre in Manchester, could be rolled out further as soon as this summer.
The Co-op has also bought Nisa Retail for up to £137.5m in a deal that’s yet to be approved by regulators, while the group will also supply Costcutter Supermarkets Group as exclusive wholesaler.
Steve Murrells, chief executive of the Co-op, said its current success showed how the Co-op’s different ownership model and approach to business, “based on returning profits to our members and their communities” – was resonating with shoppers, after a year in which membership numbers grew by 15% to 4.6m.
“We’re delighted with our performance, but we’re hungry for more and ready to create the Co-op of the future,” he said. “Whether it’s in our existing business areas or through new ventures, we want to make the Co-op ever more competitive, relevant and innovative. That is why we are launching the Stronger Co-op, Stronger Communities plan. To really succeed as a Co-op we need to be even more successful commercially and our community efforts need to be concentrated on the things that matter to people. We are going to deliver more Co-op products and services to more people throughout the country and that is what will really allow us to spread our difference.”
Chris Conway, head of digital, retail, at the Co-op, will discuss the retailer’s approach to omnichannel on an upcoming webinar with Microsoft. Find out more about the free event, to be held on April 19, on the webinar page.