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The Co-op has announced the appointment of Ken Towle as Chief Executive of its newly acquired Nisa subsidiary.  The former senior Tesco executive has taken up the role with immediate effect, replacing Arnu Misra who stepped in as interim Nisa CEO in late 2017.  The announcement comes on the day that the Co-op's acquisition of the wholesale distributor gained final legal recognition.

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Co-op customers in Milton Keynes can now have their groceries delivered by robot.  The Monkston branch has been trialling unaccompanied robot delivery for the past four weeks, promoting the service using targetted local social media marketing. Between 10-15 robots are being used and around 1,000 orders have been dispatched since the project went live a month ago.

Robots "understand" their environment

The robots travel at about 4mph and can deliver up to 10kg of shopping in under an hour. The robots weigh about 25kg, have six wheels and nine cameras and are equipped with a sophisticated sensor suite including radars, computer vision and ultrasonic sensors.  This allows them to understand their environment, enabling them to avoid obstructions and cross roads on their own, for example.  The Monkston store chosen for the trial is close to the premises of Starship Technologies, developers of the robots. 

How does the service work?

  1. Customers place their order via an iPhone app developed by Starship. Around 200 products can be ordered, excluding alcohol, cigarettes and frozen items.  The customer pays the usual in-store prices plus a £1 delivery fee.
  2. The order is picked and paid for by a human Starship employee (at the usual Co-op prices) who puts them into the robot.
  3. The robot sets off on its unaccompanied journey to the customer.  The customer can see where the robot is using the app.
  4. Upon reaching its destination, the customer uses the app to confirm arrival and unlock the lid to the compartment containing the shopping.

Is there a future for robot delivery?

Co-op is not the first retailer to test delivery by robot: Tesco also used a similar robot for one delivery last year.  Just Eat has also trialled the technology to deliver takeaways in South London.

The Co-op trial has met with a positive reaction from local customers with many wanting to try it out to see how it works.  There will inevitably be tweaks to make but with retailers prepared to explore new technologies to get closer to the needs of the customer we should expect to see more such activity in the future.

Hear more about Co-op’s plans for technology innovation from Chris Conway, Co-op’s head of food digital, at our Digital Commerce event on 16-17 October.

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The Competition and Markets Authority has cleared the Co-op’s £137.5m takeover of buying group Nisa, saying "the proposed merger does not give rise to competition concerns”.  Co-op is now likely to take over the running of Nisa in May.

Competition between shops unaffected

Co-op, as a groceries retailer, and Nisa, as a groceries wholesaler, do not compete head-to-head. However, as Nisa supplies more than 4,000 grocery stores, the CMA said it had carefully considered the potential impact of the merger on competition between shops.

As part of the “phase 1” investigation, the CMA took into account that Nisa-supplied stores would still be free to set their own prices and decide which products to stock after the merger.  It concluded that the merged company would not be able to directly determine how they compete.

Stores and shoppers free to shop around

It also examined whether the merged company could raise prices or reduce service quality for retail or wholesale customers but found that existing retail and wholesale competition made this unlikely.  As Nisa-supplied stores are able to choose between several different wholesalers, they would be able to switch supplier if prices were to increase or the quality of service go down as a result of the merger.

As far as shoppers are concerned, the CMA felt there were enough local alternatives to both Co-op and Nisa-supplied stores to ensure that people could still shop around to get the best value.

In conclusion, it said that this all meant that the merged company would be unlikely to be able to raise prices or offer a worse service to either stores or to shoppers.

Co-op expects to start running Nisa in May

The decision not to send the deal to a ‘phase 2’ investigation means that the Co-op now expects to take over the running of Nisa in early May.

Sheldon Mills, senior director of mergers at the CMA, said: “Millions of people throughout the UK shop at convenience stores and supermarkets, and it is vital that they continue to have enough choice to get the best value for them. After careful consideration, we’ve found that there is sufficient competition in both the wholesale and retail sectors to ensure that shoppers are not worse off.

Co-op Retail CEO Jo Whitfield commented: “We’re delighted with the CMA decision and are really excited about sharing our plans for the future once we gain court sanction.”

Peter Hartley, chairman of Nisa, added: “Today’s ruling by the CMA is excellent news, and a significant step towards finalising the transaction that our members voted for last November. We are very excited about our future together which will help ensure that our members are best placed to serve their communities.”

 

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Co-op reports profit increase of 25% FY17
The Co-op has reported strong trading results for the year 2017.


Nisa Retail Q4 shows benefit of P&H demise
Wholesale distributor, Nisa Retail, has announced trading figures for Q4 of its 2017/18 year (13 weeks to 1 April), reporting total sales for the period up 26.1% to £377m.


Tesco completes merger with Booker
Tesco and Booker have confirmed that their merger has become effective as of 8am on 5 March 2018, following court approval.


The Co-op has reported strong trading results for the year 2017.

Underlying profit is up 25%, at £65 million for the year.

Strong retail performance

Revenues were stable at £9.5 billion, in line with Co-op's expectations. Overall food like-for-like sales were up 3.4%, with core convenience LFL sales increasing by 4.3%. This marks four years of consecutive LFL growth for the company. Wholesale sales to independent societies also increased by 7% to £1.7 billion.

Customer loyalty remained strong for the year, with active membership increasing by 15% to 4.6 million. This takes the total number of new members since the member relaunch to 1.2 million.

Outlook

The Co-op has announced the development of the 'Stronger Co-op, Stronger Communities' plan, a number of initiatives based on improving efficiency and relevancy. As part of this plan the Co-op will expand the convenience store estate, with 100 new stores planned for 2018, alongside its acquisition of wholesaler and convenience retailer Nisa, though subject to regulatory approval.

The retailer is also looking to improve their digital offer, with a "pay in the aisles" pilot underway which will aim to enhance the shopping experience for in-store customers.

Allan Leighton, independent non-executive chair of the Co-op, said "With profits up 25%, debt down and membership up by more than 1.2 million since we launched our new scheme, we are stronger than ever before and ready to create a new, modern Co-op that is fit for the future".

 

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26-27 September, London

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