The Co-operative Group has announced sales rose 1.5% to £13.5bn at group level, with sales at its food business up 1.3% to £7.44bn, but down 0.7% on a like for like basis in the 53 weeks ending 5th January 2013.
In contrast to the overall food business, sales at the retailer's convenience stores were up 1.9% on a LFL basis, with sales increasing 5.5% over the three week Christmas period. The LFL trend turned positive in Q4, up 0.3% overall, driven by convenience and new store openings. The business is looking to build on the stronger second half of 2012, with an increased focus on price and value being key in 2013.
Acquisitions boost scale
The food business opened 83 new stores in 2012, which included the acquisition of 10 Costcutter stores in London and the Scottish chain David Sands - increasing the retailer's presence by 28 stores in Scotland. All of these stores were trading under the Co-operative Food banner before Christmas. Investment in the distribution network has improved service to stores with one new depot open in 2012, and another on track to open this month. These investments, alongside the Store Merchandising and Replenishment Transformation programme (SMART), have increased availability to more than 97.5%.
Successful delivery of 60 trial stores
The thinking behind investment for 2013 has been shaped by the successful delivery of 60 format trial stores which have received positive customer feedback and shown encouraging sales. As part of this focus to improve the shopping experience, The Co-operative Group has looked to tailor its stores to customers and locations whilst also standardising opening hours to provide a more consistent service. With the rollout of more inspiring and mission relevant formats across the convenience sector, these changes will be key to keep pace with competitors such as Morrisons, Costcutter and Nisa who are all developing new formats.
Further improving the shopping experience
Group chief executive Peter Marks commented "In food there was a marked improvement in the second half of the year, most notably with our like for like sales performance returning to growth in the last quarter......In the food business we are building on the momentum of the second half under our strengthened management team with a continued focus on prices and the roll out of new store formats. During 2013 we will further improve the shopping experience for our customers".
Outlook for 2013
Although the group is cautious about prospects for economic recovery across the UK during 2013, the year has started well, with sales at a group level performing in line with expectations. On the food side, the rollout of new formats, the prioritisation of own label development and customer services are going to feature high on the agenda for the Co-operative, helping the retailer build on the momentum from the second half of 2012.
Want to know more?
To find out more about the opportunities and challenges facing The Co-operative Group, why not join Steve Murrells and his senior team at The Co-operative Trade Briefing in Manchester on 5 September 2013. For more information please click here.