Co-op targets 50% online growth in challenging year to come

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The Co-op aims to notch up 50% online sales growth this year as it bolsters its multichannel operations.

Online sales reached £200m last year – compared with just £4m two years ago. Co-op interim chief executive Shirine Khoury-Haq said: “We aim to grow our online sales this year by another 50% to £300m.”

Co-op interim chief executive Shirine Khoury-Haq

Co-op interim chief executive Shirine Khoury-Haq is targeting continued online growth

She said the extension of digital operations has enabled the grocer to increase average basket size and boost overall sales, such as through top-up shopping when using online order collection and return services.

Ecommerce was accelerated by the pandemic and it has become one of the four pillars of the Co-op’s retail business along with stores, franchising and wholesale.

The Co-op’s ecommerce operations can serve 55% of the UK population and services are available from 1,600 stores.

However, disruption arising from technology implementation, in part designed to facilitate the multichannel shift but also serving wider business purposes, hit performance last year.

This week, the Co-op reported a fall in profits after the implementation – which was planned for a quieter period of the year – coincided with challenges such as the supply chain disruption that affected many retailers as the pandemic unwound.

Khoury-Haq said the implementation was now complete and being “optimised”.

Among its online ambitions this year, the Co-op aims to expand a trial with Amazon Prime to serve 26 million shoppers.

As the Co-op and the wider industry face challenges such as the impact of cost inflation, pressure on consumer spending and the effects of the war in Ukraine, Khoury-Haq expected another challenging year but said: “We’re off to a good start. We know exactly what we need to do in order to make ourselves absolutely fit.”

Khoury-Haq has succeeded Steve Murrells as chief executive on an interim basis. She took the role at a time of wider change in the Co-op leadership as chair Allan Leighton also prepares to step down and food boss Jo Whitfield takes a career break from May.

Khoury-Haq said: “Before I accepted the interim position, I was asked whether I would consider permanent. I have a lot of support from the board in doing this job for the foreseeable future; however, ultimately it is the board’s decision.”