In the Closer to Co-op Q&A sessions hosted by IGD in February, we heard about Co-op’s key priorities and evolving response to COVID-19.
Here we summarise some of the latest initiatives from Co-op, and how these link with our five key convenience trends for 2021.
1. Fulfilling bigger basket missions
COVID-19 has seen local convenience stores meet a wider range of food and grocery needs for take home missions. Retailers are flexing their ranges to become more mission-centric to maintain and build on gains made to basket sizes during the pandemic. Co-op is a great example of this.
The retailer reorganised its buying structure from a category to a mission focus, falling under the ‘Closer to what I need’ element of its Closer strategy. The core missions of top-up shop and impulse remain front and centre, but Co-op identified five trade missions as areas of strategic focus where they see the greatest opportunity for growth. These include Meal for Tonight, Newsagent, Drinks, Food-to-go and Frozen.
2. Showcasing value credentials
COVID-19 is creating a more challenging economic background for shoppers who are now more likely to focus on saving money than last year.
Co-op is responding by taking an insight driven approach to investment in value, to ensure what it is doing really has impact for customers. The pandemic prompted Co-op to fast track development of its new Honest Value range, completed in just 17 weeks. The range aims to serve the value end of the market, whilst not sacrificing standards. Another aim of Honest Value is to make it affordable for people to eat healthily.
Source: IGD Research
3. Accelerating online proposition
While the growth of home delivery across the UK saw an increasing number of convenience retailers entering this space before 2020, the upsurge in shopper demand for delivery due to the pandemic has made it a priority for many more.
Co-op has accelerated the rollout of its online proposition in response to the pandemic. The retailer has two pillars within its ecommerce offer. Firstly, Co-op is now the most widely available retailer on Deliveroo’s platform with 400 stores. The Deliveroo pillar is typically more focused on immediate consumption such as the food-to-go and meal for tonight missions. The range available to shoppers on Co-op’s Deliveroo store has been built significantly over the last 12 months. Reflecting Co-op’s mission strategy, the Deliveroo offer includes several bundles, which make it easy for shoppers to put products into their basket. These bundles cater to a wide range of missions including meal for tonight, breakfast, snacking, and grocery essentials.
Co-op’s own ecommerce proposition includes its own online shop and delivery fleet. The offer attracts top-up missions, resulting in bigger baskets for this pillar.
Source: IGD Research
4. Sustainability evolution
As attention shifts to COP26, the UN Climate Change Conference in November 2021, shoppers are likely to reward those companies that showcase initiatives that reduce their environmental impact.
Co-op’s sustainability priorities include its 100% packaging recyclability commitment, of which the rollout will be completed later this year. Co-op also aims to reduce emissions from products by 11% by 2025 through its Action on Climate plan.
5. Format refinement
In 2020, convenience retailers invested in new store concepts to test initiatives and to remain relevant in a changing world. In 2021, it is expected that new format launches will be refined. Formats tailored to the post-pandemic environment will evolve to incorporate longer term trends.
Co-op has launched three lab stores, enabling it to test and learn in terms of categories, missions, and services. Areas of focus include Co-op’s fresh and greengrocer propositions, sustainability, meal for tonight, and food-to-go evolution.
The retailer is also trialling vending as part of its format development. It has installed Co-op branded vending machines in depots of five other companies, as well as successfully securing an NHS listing. Remote locations and shop fronts are also possible locations.
Read our Strategic Outlook for Co-op report (subscription required) for an overview of Co-op's strategic priorities for 2021, including driving e-commerce and its 'Future of Food' sustainability goals.
Co-op Trade Briefing 2021
21-23 September, Virtual Event
Join Co-op for their most significant supplier update of the year as they discuss performance results for the year so far, what’s changed, and where 2022 looks to be heading in the retail, wholesale and online markets.
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