Comment: A much-needed sense of direction for the Co-operative

The news that the Co-operative has launched a wide-ranging survey, asking customers for their thoughts on the future direction of the business, came as no surprise.

Particularly when you consider the near disaster with the banking arm that resulted in 70% of the ‘ethical’ bank sold off.

It was this failure that perhaps led to the opinion gathering. What does the Co-operative stand for? What is its point of difference?

It’s strong on the ethical angle, looking after fairtrade farmers, and that retains loyal customers. But does it attract enough new shoppers through the door?

The lack of clarity in the food offer has long been an issue. Despite the Co-operative being a convenience operator, sales and market share have (until recently) steadily fallen despite the acquisition of rival Somerfield in 2009.

The Co-operative still has key weaknesses. Store standards can be a challenge with poor availability, poor service and an untidy store environment the usual complaints.

Perhaps the major problem has been around price perception. Ethical/fairtrade products are a noble cause but for some customers, trying to pay their own gas bill became more pressing than the cocoa farmers of Kuapa Kokoo.

Steve Murrells joined the business in 2011 as retail boss and has set about changing perceptions of the Co-operative with a superb own-label relaunch under the Loved by Us tagline. There has also been some range expansion in fresh foods - vital for the convenience sector.

Perhaps the most exciting element of his reshape of the food business was the launch of the ‘Gen2’ stores, which feature new thinking on the store environment, fresh foods and, crucially, price. Inspiration tables designed to ‘build’ an evening meal and a smarter bakery offer are notable innovations.

Compared with the wider Co-operative Group at least, food retail looks to be one business unit that finally has a sense of direction.