The Co-op group chief executive Euan Sutherland is battling to bring the mutual into a new era but has warned the business will make redundancies to strip out cost.
Sutherland told Retail Week: “This group’s costs are too high, efficiency is not where it should be in any of the businesses and we are working our way through that.”
The Co-op has a long-term target to strip £500m of costs out from the business and has already identified £100m it intends to take out this year. Sutherland said that, while there will be redundancies, the scale and timing of the job cuts has not yet been decided.
The mutual yesterday kicked-off a month-long public poll – conducted by YouGov for a £100,000 fee – as it aims to use customers’ views on its ethical stance, community involvement and political donations to shape its future.
The results of the poll will feed into a wide-scale internal review of The Co-op, the results of which will be published in May.
Sutherland said customers are not aware of The Co-op’s ethical standpoint. He said: “I think we have lost our way. In some people’s eyes it is just the local food store or pharmacy or funeral directors.
“We have lost that element of our point of difference. Our plan is to get back to the future. There is an opportunity to land a new Co-op for a new generation and start a new era of our history.”
Sutherland said the retailer is working hard to drive sales and market share in its food arm. “We will lower our prices, we will drive own label products up and will improve store formats,” he said.
“All of that would be done by a Tesco or Kingfisher but we are different. Next month we will report an ugly set of results but when we get back into profit we can recycle that back into local communities.”
The Co-op is targeting becoming the “number one convenience retailer” in the UK and is in the process of rolling out its ‘generation two’ Fresh Format shops.
Kantar Worldpanel data released last week showed The Co-op’s sales grew 0.3% in the 12 weeks to February 2 and its market share edged down to 6.1% from 6.2%.
The Co-operative Food’s chief operating officer Sean Toal is to leave the mutual to join discount general merchandise retailer Wilkinson. Sutherland said The Co-op will look internally and externally for his replacement.