Co-op readies for competition in convenience

Posted by Josette Dunn on 19th March 2010

Peter Marks, the boss of UK retailer The Co-operative Group, yesterday (18 March) issued a “bring it on” rallying cry as the company prepares for competition from the likes of Sainsbury’s and Morrisons in the convenience sector.Speaking to just-food as the Co-op issued a 20% rise in annual profits this morning, Marks was unconcerned about the prospect of fierce competition in the UK convenience channel.

Last week, Morrisons, which is opening smaller stores than it has historically run, reaffirmed its expansion plans in the UK. Sainsbury’s, meanwhile, is looking to the convenience channel to help it meet a target of increasing selling space by 10% by 2012.

The Co-op chief executive was relaxed about the prospect of the company’s rivals looking to muscle in on the retailer’s heartland. “This doesn’t worry us at all. We are the biggest convenience retailer by a long way. Bring it on,” Marks said.

The company is also facing growing competition on ethical issues. The Co-op has long emphasised its “ethical” credentials, notably in the Fairtrade category, but its rivals are making similar moves. Last month, Sainsbury’s claimed to be the “world’s largest Fairtrade retailer”.

Marks, however, again adopted a bullish tone, dismissing claims from other retailers as “playground stuff”. He added: “We’re delighted that other people are following us.”

This morning, the Co-op reported a 5.5% rise in like-for-like sales on an annual basis, although Marks admitted the retailer’s sales were so far flat during the first two months of its first quarter.

Marks cited food deflation and the cold snap at the start of the year for the slowing sales growth, although he pointed out that the UK grocery market as a whole was flat.

The Co-op chief said the UK economy was “starting to recover” but was cautious on the economic outlook and said that, while there is “light at the end of the tunnel”, it was only “flickering”.

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