Further price cuts at the Co-operative Food
The move follows the retailer’s pledge in April to cut prices across hundreds of staple products such as bread, milk, eggs, chicken, bacon and bananas.
The Co-operative Food customer director Andrew Mann said: “We are introducing permanent price reductions on hundreds of key product lines as we respond to the needs of local people. The reduction in the price of bacon coupled with our own brand 75p farmhouse bread has proved a winner and now the cut in the cost of our own brand tomato ketchup completes the picture for lovers of the bacon butty.”
Commenting on the announcement, Professor Chris Edger, business and retail expert from Birmingham City University, said: “The Co-op has announced today that they will pump another £100m into their price cuts campaign. This follows a highly publicised move by Morrisons to commit about £1bn to reduced pricing, a recent decline in food sales by 0.8% (largely due to price deflation and changes in consumer buying habits) and Tesco’s expected price assault off the back of the creation of a contingency fund from reducing their dividend, cutting capital spend and (potentially) making major central cost savings.
“The assault of the hard discounters and dime stores on the traditional food retailer seems to be resulting in a response from the traditional players but – in the case of the Co-op – will it work?
“Once the largest food retailer in the UK (in the 1960s it had a 26% market share) it had retrenched to a largely convenience format until buying Somerfield 2009. This has proved to be a difficult acquisition and running/integrating larger foot printed stores has distracted management from what it had done really well – building a formidable network of convenience stores (still the largest in the UK at over 2,000 units).
“Will price revive like-for-like declines or would the Co-op be better off reshaping its estate (downsizing footprints) and getting back to concentrating on operational execution; improving availability, range and quality in its convenience stores? Impulse convenience does not rely just upon price – execution of the basics especially around chilled/fresh are a major differentiator of success. Price is not the only solution.”
Source: talkingretail.com
