The Co-operative Group is to ramp up its online non-food online operations but expects the grocery market to remain tough.
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The retailer, which published strong retail results this week, is installing pods in food stores enabling shoppers to order electricals.
It will also launch an online pharmacy in May, which will sell cosmetics and health and beauty lines. The intention is to offer prescriptions once licences are received.
Selling food online is unlikely, however. Chief executive Peter Marks said the retailer’s presence in every postal district meant customers generally walked to stores.
The group’s food business, which became the fifth biggest following the acquisition of Somerfield, recorded a 33% rise in operating profits to £383m before exceptionals. Sales rose 4.8% to £7.5bn.
Like-for-likes fell 2.5%, partly as a result of disruption as Somerfield shops were converted to Co-op.
Marks said promotions in the food stores were at the 50% level - “unheard of territory” - reflecting consumers’ tighter budgets.
He said: “Consumers have a budget they’re used to spending on food and, despite inflation, they’re saying that’s the amount I’ll spend. There’s no growth in food at all.”
Kantar figures this week showed the growth rate in the 12 weeks to March 20 slipped to 2.6%. It was the first time since July 2009 that the market growth rate fell below the inflation rate, which was 4%.
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