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Co-op more than doubles full-year online grocery sales as it works with fast delivery partners to get its goods to customers

Starship Technologies robots wait for a delivery outside a Co-op branch. Image courtesy of Starship Technologies

The Co-op more than doubled its online grocery sales to £200m in its latest financial year. The figure represents fast growth – from £70m in 2020, and £4m in 2019 – for a food business that is now aiming to reach shoppers through a variety of digital and other channels beyond its own stores. This is part of a wider strategy of finding capital-light routes to market.

The grocer now sells online through its own website as well as through fast and ultrafast delivery through partners that include with Amazon, and a range of mobile apps, including robot delivery through Starship Technologies and Deliveroo.

Co-op products are now available for ecommerce delivery from 1,600 shops in more than 450 places. Ultrafast delivery is now available from 2,000 shops. The retailer is now planning to expand its Amazon Prime trial. It is also selling through vending machines and micro-supermarkets in locations including offices and hospitals, as well as to students in 10 stores on and off campus.

Full-year figures

The online growth came as the Co-op – whose operations include legal, insurance and funeral businesses as well as its food business – saw group revenue reach £11.2bn in the year to January 1 2022. That’s down from £11.5bn a year earlier, and slightly up from £10.9bn a year earlier. Within that, its food and wholesale businesses reported sales of £9.1bn, down from £9.3bn in 2020 and up from £8.9bn in 2019.

The year-on-year fall followed what the Co-op described as an unprecedented year as sales were boosted by Covid. It also reflects the “impact of significant supply chain disruption and system transformation” on the food business as it moved towards a more multichannel model.

Pre-tax profits of £57m were down £70m on the £127m reported last year, and £33m higher than the £24m reported in pre-pandemic 2019.

Shirine Khoury-Haq, interim chief executive at the Co-op, says: “The Co-op is a business designed for the long term and that is the path we are on. The last year has seen us facing some significant challenges, including significant supply chain issues in the second half coming at the same time as our Food business transformation and increasing inflationary pressures. The difficult operating environment disproportionately impacted our Food business, given its focus on the community convenience market, with an operating model that is more reliant on flexibility in the supply chain.

“The Co-op remains uniquely positioned. We continue to be driven by our vision of co-operating for a fairer world and have a platform of businesses in the right markets to drive change, and get closer to our members, customers and communities. The significant investment we have made across our business in recent years now provides the basis for us to move forwards in a more efficient manner.”

During the year, 517,000 new members joined the Co-op, and £21m was shared through member rewards, including £10m claimed through digital offers. The Co-op also launched a ten-point climate plan, which includes a 2040 net zero target and an ambition to be the world’s first food retailer to produce carbon neutral own brand food and drink by 2025.

Allan Leighton, chair of the Co-op, says: “The past year has been a challenging one for our Co-op, but we continued as planned with our investment strategy to strengthen our Co-op’s future state.”

He adds: “The economic headwinds look stark and will be tricky to navigate but through our continued planned strategic investments our Co-op is well placed to ride out the storm and prosper beyond.”

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