‘The Co-op’s values may set it apart, but it’s value that’s front of mind for shoppers’

My local Co-op looked a bit different this week when I paid one of my frequent visits.

Taking precedence over the usual signs in the window about choir concerts and school fundraising events was a poster trumpeting the Co-op’s latest initiative—an Aldi price match for members. Inside, the new price match was prominent and well executed on the shelves.

It made quite an impact. Until the relatively recent opening of a Premier almost next door—stocking Tesco’s low-price Jack’s value lines alongside some well-chosen local product from one of the village farms—the Co-op enjoyed pretty much a monopoly of local shoppers.

Many of them are a fairly captive bunch. They might get on the bus once a week for market day a few miles down the road, but a lot of what is an older demographic relied on the Co-op for their essentials.

While they love it, you also sometimes detected a suspicion, whether justified or not, that they were paying a premium to a retailer that, whatever its good points, was the only show in town.

Co-op shoppers in plenty of other places no doubt experienced the same mixed feelings. So the big ramp-up in the value proposition is likely to go down well, providing reassurance to those customers that they’re not being taken for granted.

It’s also an essential move in the present competitive landscape in locations where the mutual is up against the value appeal not just of Aldi, but Tesco and Sainsbury’s, and as Asda signals a return to its low-price proposition.

The Co-op, which issues full-year results on Thursday (April 3) described the initiative as its “biggest ever member value campaign” and “the largest rollout of Aldi Price Match across the convenience sector”. That latter point tacitly recognises the fact that Sainsbury’s was the first to make a similar move in its c-stores late last year.

But the Co-op’s decision, applying to approximately 100 everyday items such as fruit, veg and dairy is significant. As Co-op Food boss Matt Hood said: “In this current economic climate, price is most often the deciding food shopping factor.”

The Co-op needed to act. The latest Kantar 12-week data showed its market share edged down from 5.3% to 5.1%, and sales growth of 0.7% was below the industry average of 3.2%.

The new price push is also in keeping with the Co-op’s aim of targeting 8 million members.

“In today’s environment more than ever, retail basics such as a clear value for money proposition are the cornerstone”

Kantar’s Sally Ball observed when its latest data was released earlier this month: “Households visited just under five different grocers this month, the lowest level in February since 2021.

The growth of supermarket loyalty schemes is partly behind this as shoppers use them to unlock exclusive discounts.” So the Co-op was right to amp up its loyalty appeal.

It’s also in keeping with the changing convenience landscape, and what that word means for contemporary shoppers. The Co-op’s Aldi price match promise extends to its rapid delivery services, which it said is an industry-first.

While Hood’s comment on the vital role of price was right—he described it as being “the Achilles heel of convenience shopping”—it’s not the only issue the Co-op needs to confront. Like Asda, availability is a persistent problem so the price push needs to be accompanied by improvement efforts in other areas.

The Co-op may say, with some justification, that its values set it apart. But in today’s environment more than ever, retail basics such as a clear value-for-money proposition are the cornerstone.