Co-op to invest in prices and tech to ‘stay relevant’ in looming grocery war

With the UK currently in its deepest recession in living memory due to the effects of the coronavirus, and the big four supermarkets all investing in price to woo consumers away from the discounters, the Co-op too has vowed investment in that area. 

The convenience store specialist’s chief financial officer Shirine Khoury-Haq said the Co-op had been monitoring the moves of its competitors and promised it too would take action in the second half of the year. 

“Clearly we’re watching with price across the market and we will be investing in price, as other retailers will and we will continue to monitor that coming towards the end of the year and into the next,” she said. 

While the Co-op would be looking to invest in driving the prices of everyday products down, Khoury-Haq also said the shift to online meant the retailer would need to invest in technologies that could drive efficiencies and deliver cost savings for that channel as well. 

“There has been a shift to more online in our customer base. That’s been precipitated by Covid but it’s not just in the food business. We’ve seen it in our funeral business and in our healthcare business, as well. 

“Part of that has been a response to Covid, but part of it has been a response to our customers’ growing preference for conducting business online. We expect a proportion of that to continue.

“So there will be technology investments facing the customer and internally, but also in pricing and in providing the best customer experience in our bricks and mortar.”

Khoury-Haq said that the Co-op would be investing in back-office AI range-forecasting software, and robotics for delivering grocery orders and also for more efficiently packing them. 

The Co-op has also resumed its new store openings and refitting strategy that was temporarily paused during the coronavirus lockdown. The retailer is set to spend £130m on 50 new stores and will refit a further 100 before the end of the year. 

Chief executive Steve Murrells echoed Khoury-Haq’s comments and pledged the Co-op would do everything it could to “stay relevant” in a shifting consumer landscape.

“I would say that we look at this through a lens of value for money, especially in our core food business. We need to be fairly priced, while offering the best service and quality products,” he said. 

“We are in the midst of a tightening price reduction and we’ll make sure that we stay relevant but equally, provide other things on top.”