Key messages

  • Ranges at the Co-op are segmented into four category roles
  • The Co-op is keen to build its convenience focused ranges
  • The Co-op's sector leading stance on responsible retailing is a key element of its identity and is a key differentiator

Ranging

  • The Co-op's range segmentation strategy divides categories into four types
    • Hero - categories with significant growth opportunities and potential to generate a step change performance. NPD is being prioritised in these categories
    • Drive - categories where there is the potential to increase sales participation, either due to strong market growth or where the group traditionally under-trades
    • Squeeze - categories in medium or long-term decline or where the business tends to be over spaced relative to competitors
    • Hold - categories with static growth or where the group has allocated the correct amount of space
  • Recent insight into customer shopping missions has enabled the retailer to ensure that ranges are varied by location, and are locally relevant
  • As The Co-op looks to develop its convenience estate, it will be looking to rebalance category space in line with target missions. This is likely to see an increased focus on chilled prepared and fresh food in smaller stores, as well as a increase in food-to-go, ready meals, pizza and bakery.
  • The Co-op is currently working on its second generation stores which focus on; 'my shop for today', 'my top-up shop' and 'my shop for the week'. These formats will allow The Co-operative to tailor its offer to meet customer needs by location
  • The small format of many Co-op stores means that brands need to justify their shelf presence through the volumes sold
  • Developing new products in line with changing customer needs is a key aspect of the Co-op's ranging strategy
  • The Co-op currently has over 3,000 private label SKUs
  • The Co-op is likely to favour brands that share its commitment to higher ethical, environmental and animal welfare standards
  • The Co-op is continuously looking to enhance its range of healthy eating options
  • In June 2012 the Co-op introduced Amazon collection lockers as a trial in four London stores. The lockers provide Co-op shoppers access to a wide range of non-food, giving shoppers an extra reason to go to its food stores and possibly providing a flexible alternative to the limited SKU numbers available in convenience stores. Following this trial, the scheme has now been rolled out nationwide to a number of stores. 

Sourcing

  • The CRTG is highly committed to sourcing goods from British suppliers and British farmers
  •  It actively seeks smaller regional suppliers with appropriate products through an ongoing programme of regional 'meet the buyer' events
  • As a 'Responsible Retailer', the Co-op's sourcing strategy has placed particular emphasis on Fairtrade and organic ranges, while its rigorous environmental pledges also filter through into sourcing of both products and packaging
  • Extending the range of 'Elmwood' higher animal welfare standards is a major focus
  • International co-operative movement links, especially in Asia, are now providing significant opportunities for global sourcing, in particular for non-food ranges
  • The Co-op is also a member of SEDEX (Supplier Ethical data Exchange), an organisation for businesses committed to continuous improvement of the ethical performance of their supply chains. Through SEDEX, the Co-op is able to benchmark its operations against other members and share in best practice across a number of initiatives

Key messages for suppliers

  • It is vital for suppliers to fully understand which range segment their product is part of in order to implement effective category management
  • Suppliers that can demonstrate that they are aligned to the Co-op's values, in terms of ethical, environmental and animal welfare standards, will be best placed to develop relationships with the group
  • The Co-op is launching its 'generation two' stores, building on the success of the first generation trials, offering tailored ranges by location. It is important to understand how these will affect your category.