Co-op fires latest grocery price salvo with £125m investment

• Co-op invests £125m into slashing prices of more than 100 products
• Price is key in Co-op’s bid to “transform shopping experience”
• Salvo comes hot on the heels of price investment from big four grocers

The mutual will focus on cutting the cost of fresh fruit and vegetables in its latest price offensive as it bids to win back customers from convenience rivals and “transform the shopping experience for communities.”

“We are freshening up our stores in every sense, investing in price and the in-store environment to transform the shopping experience for communities.”

Steve Murrells, Co-op

Prices of some of its fresh produce will be halved, the grocer said, as part of a period of “revolving offers” on popular items.

The Co-op’s latest wave of price cuts will start with reductions to food including iceberg lettuce, cucumbers and 500g bags of carrots, all of which will be available for 39p from today.  

It comes after the mutual issued a pledge to continue investing in price at the time of its full-year results in April – and it has taken bosses just two months to put that plan into action.

Shopping habits

Co-op retail chief executive Steve Murrells said: “Consumers are shopping differently, buying little, more frequently and, increasingly swapping the weekly shop for purchasing what they need, when they need it.

“In addition, food retailing remains highly competitive and we have responded to provide customers with great prices and fresh, quality produce at each of our stores.

“This makes our price investment the biggest by a convenience retailer, providing consumers across the length and breadth of the UK with lower-priced produce and helping them to keep shopping in their neighbourhood.

“We are freshening up our stores in every sense, investing in price and the in-store environment to transform the shopping experience for communities.”

As part of that planned transformation, the Co-op also wants to open 100 new convenience stores across the UK in 2015 and will complete 255 store refits, while continuing to focus on improving its price point.

Price war

The Co-op lowered prices across 40 categories last year following a £100m investment, reducing the price of staple products by as much as 20% as part of its ‘Fair & Square’ pledge.

Prices of goods including eggs, chicken, bread, bananas, tea bags and chopped tomatoes were all slashed in the price programme as the mutual hit back against similar moves from the big four.

That fierce price war has raged on into 2015, with the Co-op’s latest wave of cuts being revealed hot on the heels of new Morrisons boss David Potts’ first price offensive.

Last week the embattled supermarket chain unveiled plans to slash the price of 200 everyday products including bread, milk and butter, with branded and own-brand items reduced by up to a third.  

Asda committed £300m to lowering prices in the first quarter of 2015, while Sainsbury’s is investing £150m this year to cut the prices of 1,000 products.

Market leader Tesco slashed the price of around 380 branded products including Hovis, Coca-Cola, Marmite and Tetley by an average of 25% in January in a bid to boost sales.

The supermarket giant’s sales volumes edged up 1.5% in the fourth quarter of the last financial year – the first time they had risen for more than four years. Tesco boss Dave Lewis will reveal its figures for the first quarter of the current financial year next Friday.