In a challenging presentation, the chief executive of retail at the Co-operative Group, Steve Murrells, outlined the shortcomings of the Group’s food business and its strategy for recovery.
Steve Murrells was appointed 18 months ago, following a career in the retail sector – at Sainsbury’s, Tesco and latterly as chief executive of Danish company, Tulip.
Mirroring the Co-operative Group CEO’s narrative about the need for transformational change and turnaround, Mr Murrells looked at the challenges ahead.
On taking up the role, Mr Murrells visited stores around the country. “Our shops,” he said, “were tired, underinvested and not places where you would want to shop. Our ranges were completely inadequate. I could go into our stores and find 15 different types of tuna.”
While 42% of customers think Co-op food stores are ethical, only 10% think they are value for money and 9% say they meet their needs.
“We’ve fallen out of love with food. More importantly we’ve fallen out of love with our own brand,” said Mr Murrells.
The Group is addressing the issues in the food business through its True North strategy, “a recovery programme [that] gets us back to where we should have been 15 or 20 years ago.”
“In fact,” he added, “some of the things I’m doing today I did 15 years ago in Sainsbury’s and Tesco.”
The strategy focuses on making the food stores easier and more appealing places to shop. The number of products will be reduced, the layout made more accessible, the shelves regularly stacked, the prices more competitive and the quality of own brand products improved.
The stores themselves are at the centre of the strategy, and he introduced an upbeat video of the Group’s ‘generation two’ stores, which are beginning to be installed. With more space, fresh produce, larger bakeries and an intuitive layout, it is a different kind of shopping experience that will form part of the wider strategy to turn the Co-operative Group around.
More from the conference:
James Walton: ‘There is no room to be complacent’
Professor Tim Lang: ‘I have a very sober view of the food system’
Lukáš Nemcik: ‘Get to know the Customer’
Todor Ivanov: Euro Coop encourages European co-operatives to share best practices
Professor Johnston Birchall: Governance lessons from the world’s largest co-operatives
Neil Turton: ‘We are a business-owned co-operative’