Co-op looks to catch up rivals with launch of online groceries

 

The Co-operative has revealed plans to launch groceries online, in a belated attempt to grab a slice of the fast-growing £6.1bn market dominated by Tesco, Asda, Sainsbury’s and Ocado.

The UK’s fifth-biggest supermarket chain is to introduce four trials before Christmas, each with a different delivery model, to figure out which is the most profitable method.

The Co-op and Morrisons, which is teaming up with Ocado to sell food on the web next year, are the only big supermarkets currently not selling groceries online.

The Co-op’s head of food, Steve Murrells, admitted it had been losing out to rivals by not having an internet grocery presence.

He told the trade paper Retail Week: “We need to get match fit if we are going to start to compete again.

“For the last few years we had lost our mojo and we needed clear leadership and direction.”

In addition to smaller convenience stores, food online is the fastest-growing area of the UK’s £163.2bn grocery market.

In fact, spending on groceries on the web is set to almost double from £5.6bn in 2012 to £11.1bn by 2017, according to the trade body IGD.

The online market is dominated by Tesco, which has nearly a 50 per cent share, although Sainsbury’s, Ocado, Asda and Waitrose also have substantial businesses.

The low average basket spend of £6 at the Co-op, which has nearly 3,000 grocery shops, has been one of the factors which has made it reluctant to launch online before now.

Mr Murrells said: “There are two channels growing in grocery – convenience and digital. We want to find a convenient solution to online food retailing.”

He added: “Evidence shows it replaces bricks-and-mortar sales and is margin eroding.

“But if you are not prepared to eat your own children someone  else might.”

Grocery is a key business within the pharmacy-to-funeral service mutual organisation, which has been hit by a gaping black hole in its banking division’s finances recently.

The Co-op’s food operation saw profits fall by 9 per cent to £288m over the year to January, following weak sales in its first half.

PROMOTED VIDEO
News
peopleGerman paper published pictures of 18-month-old daughter
Arts and Entertainment
'A voice untroubled by time': Kate Bush
musicKate Bush set to re-enter album charts after first conerts in 35 years
Life and Style
tech
Arts and Entertainment
Robin Williams' life story will be told in a biography written by a New York Times reporter
arts + ents
News
i100
Life and Style
food + drink
Life and Style
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Voices
voices
Sport
Roger Federer is greeted by Michael Jordan following his victory over Marinko Matosevic
tennisRoger Federer gets Michael Jordan's applause following tweener shot in win over Marinko Matosevic
News
peopleJustin Bieber accuses paparazzi of acting 'recklessly' after car crash
News
people
Arts and Entertainment
Oppressive atmosphere: the cast of 'Tyrant'
tvIntroducing Tyrant, one of the most hotly anticipated dramas of the year
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Client Services Executive / Account Executive - SW London

£23000 - £26000 per annum: Ashdown Group: Account Executive / Client Services ...

PA to CEO / Executive Secretary

£36000 - £38000 per annum: Ashdown Group: Executive PA to CEO & Executive Dire...

Generalist HR Administrator, Tunbridge Wells, Kent - £28,000.

£25000 - £28000 per annum: Ashdown Group: Generalist HR Administrator - Tunbri...

Senior C# Developer (.NET, C#, JMS, TDD, Web API, MVC, integrat

£45000 - £75000 per annum + benefits+bonus+package: Harrington Starr: Senior C...

Day In a Page

Kate Bush, Hammersmith Apollo music review: A preamble, then a coup de théâtre - and suddenly the long wait felt worth it

Kate Bush shows a voice untroubled by time

A preamble, then a coup de théâtre - and suddenly the long wait felt worth it
Robot sheepdog technology could be used to save people from burning buildings

The science of herding is cracked

Mathematical model would allow robots to be programmed to control crowds and save people from burning buildings
Tyrant: Is the world ready for a Middle Eastern 'Dallas'?

This tyrant doesn’t rule

It’s billed as a Middle Eastern ‘Dallas’, so why does Fox’s new drama have a white British star?
Rachael Lander interview: From strung out to playing strings

From strung out to playing strings

Award-winning cellist Rachael Lander’s career was almost destroyed by the alcohol she drank to fight stage fright. Now she’s playing with Elbow and Ellie Goulding
The science of saturated fat: A big fat surprise about nutrition?

A big fat surprise about nutrition?

The science linking saturated fats to heart disease and other health issues has never been sound. Nina Teicholz looks at how governments started advising incorrectly on diets
Emmys 2014 review: Can they genuinely compete with the Oscars

Can they genuinely compete with the Oscars?

The recent Emmy Awards are certainly glamorous, but they can't beat their movie cousins
On the road to nowhere: A Routemaster trip to remember

On the road to nowhere

A Routemaster trip to remember
Hotel India: Mumbai's Taj Mahal Palace leaves its darker days behind

Hotel India

Mumbai's Taj Mahal Palace leaves its darker days behind
10 best pencil cases

Back to school: 10 best pencil cases

Whether it’s their first day at school, uni or a new project, treat the student in your life to some smart stationery
Arsenal vs Besiktas Champions League qualifier: Gunners know battle with Turks is a season-defining fixture

Arsenal know battle with Besiktas is a season-defining fixture

Arsene Wenger admits his below-strength side will have to improve on last week’s show to pass tough test
Pete Jenson: Athletic Bilbao’s locals-only transfer policy shows success does not need to be bought

Pete Jenson: A Different League

Athletic Bilbao’s locals-only transfer policy shows success does not need to be bought
This guitar riff has been voted greatest of all time

The Greatest Guitar Riff of all time

Whole Lotta Votes from Radio 2 listeners
Britain’s superstar ballerina

Britain’s superstar ballerina

Alicia Markova danced... every night of the week and twice on Saturdays
Berlin's Furrie invasion

Berlin's Furrie invasion

2000 fans attended Eurofeurence
‘It was a tidal wave of terror’

‘It was a tidal wave of terror’

Driven to the edge by postpartum psychosis