Co-op eyes online grocery move

The Co-operative is to become the latest and last of the big six supermarket to move into the online grocery sector, with trials for its e-commerce set to commence later this year.

The Co-op

The supermarket is currently deciding whether to roll out a bespoke offering tailored for the convenience market or a more common click and collect or home delivery route.

It will trial four different models of delivery and is likely to utilise its existing fleet of vans, which deliver shopping worth more than £25 bought in store to customers’ homes, according to a report in trade magazine Retail Week. The article says the supermarket will also leverage its existing click and collect partnership with Amazon, which has installed lockers in The Co-op’s larger stores.

Steve Murrells, chief executive of The Co-operative Group Retail, says: “We’re currently looking at a number of digital solutions to provide an online grocery offering, which will complement our strong community food retailing position. 

“We recognise that the online grocery market is a rapidly growing channel, which provides a significant opportunity for us as, primarily, a convenience retailer. We have trials planned later in the year to help us identify the best convenient solution to online food retailing.”

Online sales currently represent just 3.4 per cent of the £163.2bn UK grocery market, according to IGD figures, but the sector’s share is growing which marks an opportunity for The Co-op to regain market share lost to its rivals – most of which have had e-commerce sites for some time.

It is hoped the move to digital will turnaround the Co-op’s struggling food division, which reported a 9.5 per cent drop in underling profit to £288.4m in the year to 5 January. The company will release its half-year interim results next week.

The Co-operative had a 6.4 per cent share of the supermarket sector, according to Kantar Worldpanel data for the quarter to 7 July, but discounters Aldi (3.6 per cent share) and Lidl (3.1 per cent) and upmarket grocer Waitrose (4.8 per cent) are fast gaining ground on its position as the fifth biggest supermarket in the UK.

The news of the Co-op’s commerce trials comes five months after Morrisons announced plans to move into the grocery market by 2014, with the help of Ocado’s technology. 

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