As part of the IGD Convenience Retailing Summit in London on 16 June, Phil Ponsonby from Midcounties Co-operative told delegates that convenience stores must revise their range and style for the modern shopper. At the time of the summit, Mr Ponsonby was group general manager for food retail. He has since been appointed deputy chief executive for trading.
Mr Ponsonby explained how Midcounties Co-op had revitalised its food output, breathing new life into the society’s stores and enabling them to not only survive in a highly-competitive market, but to thrive. “It’s about a revolution in food,” he said.
More from the summit: Innovation can continue to drive co-operative and convenience retail
One of the ways in which convenience stores can better serve their customers, Mr Ponsonby believes, is to change their layout as customers tend to “shop by mission, not category”. Placing breakfast, lunch or dinner items together in store is more suited to the way in which shoppers approach filling their baskets.
Mr Ponsonby also echoed the view of Calum Kirk from the Co-op Group, who earlier in the day stressed that it wasn’t affluence that defined how customers shopped, but attitude towards food. He cited the examples of a retired couple living in the Cotswolds versus urban, wealthy couples in cities – there will likely be a different outlook on food and the type of products they buy. The retailer’s job was to embrace these differences.
We’ve had it our own way for a long time – it’s now a complete reversal
Convenience retailers such as co-ops also have the opportunity to take advantage of the current changes in the retail sector. Mr Ponsonby noted that more people than ever are buying their food online and the rise of discount supermarkets continues – but that also means there will be more people buying their fresh food from convenience stores, including co-ops.
“We’ve had it our own way for a long time – it’s now a complete reversal.”
Last year, Midcounties launched a new supermarket format that was based around quality local produce. Mr Ponsonby spoke of how the co-operative now stocked locally sourced, seasonal fruit and vegetables. Stores had done the ‘Jamie Oliver challenge’ – ensuring they stocked every ingredient used in the chef’s cookbooks. The shelf space given to milk, bread and newspapers had been reduced, replaced with growth areas such as coffee, gluten-free food and parcel services.
“We are focusing on food and it’s working for us,” said Mr Ponsonby and pointed out that co-ops are intrinsically ethical, and should take the lead on healthy eating – another growth area.
Midcounties Co-operative recently posted annual results showing a 3.1% increase in sales for 2015/16 compared with the previous year. These results were boosted by an 11% increase in income from Co-operative Energy, part of the Midcounties society. In May, society CEO Ben Reid announced his retirement saying that the enterprise was now well-positioned for the future. Upon the request of the board, he will continue to work in the society in a new, part-time role as group chief executive to help create a structure that reflects the growth and significance of Co-operative Energy.
In the retail sector, another area where Mr Ponsonby believes co-ops can gain an advantage is their ability to forge relationships with customers. The inherent community aspect of co-operatives means engagement can be more easily forged with customers than at other businesses. At Midcounties, 65% of shoppers are members and the society has introduced a community space in stores where those members can give feedback, post community notices and generally interact. A campaign calling for shoppers to ‘share what you love’ was also popular, with photos in store of customers with their favourite products.
The future for convenience is to be really brave and innovative about food
Co-operatives can also prosper against privately-owned enterprises when it comes to colleague satisfaction. Staff at Midcounties are involved in finding local suppliers, and are encouraged to be passionate about the food on sale, said Mr Ponsonby. “Happy colleagues are good for business.”
Mr Ponsonby ended with a call for collaboration. He cited areas where co-ops had not previously been successful, such as food-to-go, as opportunities for collaboration with partners who have more experience: “The future for convenience is to be really brave and innovative about food.”