The Co-op’s food business is to unveil a round of price-cuts in the latest phase of its strategy to revive the retailer and exploit its convenience appeal.
Co-op retail chief executive Steve Murrells said he would put his foot down on the price pedal.
“Very shortly we will launch our price campaign,” he said. “You will see us accelerate our activity. It will be significant, real and customers will notice the difference.”
Last week the Co-operative Group reported that its food business generated full-year sales last year of £7.24bn, down from £7.44bn the previous year, delivering underlying an operating profit fall from £269m to £247m.
However a £226m write-down related to the acquisition of Somerfield resulted in the food arm making an operating loss of £35m.
Murrells, who took the helm of the food business in 2012, has overseen the development and implementation of the True North strategy, designed to transform the business, and is focusing his efforts on strengthening its power in the convenience market.
Last year the Co-op’s c-stores generated a like-for-like sales increase of 1.6%, rising to 5.3% in the second half. That compared to a respective 0.2% fall and 0.6% rise at the retailer’s food division overall.
The focus on convenience retail means that the retailer will exit larger premises but will continue to open c-stores. It has a target of 4,000 compared to just under 2,800 at present.
The retailer is overhauling its own-brands and revamping stores as well as cutting prices. It has introduced the Generation2 store model – there are 20 at present – which has outperformed other stores.
Murrells said: “We’re already starting to think how we can go faster, given the signs of good results.”
The Co-operative Group, hit by problems at its banking arm and riven by strife at group board level, last week recorded an annual loss of £2.5n after what interim chief executive Richard Pennycook described as a “disastrous” year and the worst in its 150-year history.