Co-operative Group has this morning been given the green light for its acquisition of Somerfield. As long as the Co-op disposes of stores in 133 locations, the sale will not be referred to the Competition Commission.
The decision will be welcome news to Co-op chief executive Peter Marks. He is eager to get started on the integration in his attempt to become Britain’s fifth big grocery player.
The timing of the acquisition is in some ways of benefit to Marks. While the climate is very tough, the grocer’s ethical stance could be what consumers are looking for as confidence in the huge corporate companies, such as banks, continues to slide.
The deal could also lead to a new era of retail chief executives. In times of austerity, consumers won’t necessarily want to hear about the personalities that run their shops, they will want to physically see what those retailers can do for them.
Take Asda and Morrisons, for example. Both are performing fantastically well and are run by chief executives that don’t court the limelight. Asda’s Andy Bond and Morrisons’ Marc Bolland are vocal when they need to be but they don’t feel the need to talk about themselves – they refer only to the customers’ needs.
While it’s easy to see why Asda and Morrisons will do well in a downturn, both being value brands, we can also point to the change in Sainsbury’s. Chief executive Justin King loves the limelight but the image Sainsbury’s has projected over the past few months has not been about him, but about value.
Perhaps King has learnt from what we’ve seen happen at Marks & Spencer. The ultimate retail charmer Sir Stuart Rose has retrenched since the start of the downturn and comes across as defensive when the retailer updates the City. Rose has courted the media for so long that they won’t let any stories be just about Marks & Spencer, it will always be about him.
As Co-op’s Marks is now entering the big time grocery market, he would do well to take a long look at how the landscape has changed. He has so far kept a low profile at Co-op, despite already managing its colossal merger with United Co-operatives. And if he keeps the focus on its product and ethical stance once the Somerfield merger starts in earnest, he could well emerge a grocery favourite.