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Looking ahead: Simon Cairns, BWS category trading manager, Co-op

Published:  07 August, 2019

As the first half of 2019 draws to a close, Harpers asked key trade figures to highlight the current challenges, ongoing trends and opportunities

We continue our series with insights from Simon Cairns, BWS category trading manager, Co-op

How has the first half of 2019 been when compared to the same period in 2018?

The most significant difference has been the weather as we have been competing with a very hot summer of 2018. That, combined with the summer of sport last year meant that Co-op saw record weekly like-for-like food sales.

To grow and compete in this industry, we’ve identified the need to look at new channels to attract customers and take new opportunities to widen access to Co-op products. Co-op is the leader in convenience shopping and there is a growing demand among consumers for the delivery of food products and we are keen to explore partnerships. In March Co-op launched its first-ever online delivery service using courier delivery via an electric cargo bike. As part of a trial, the service currently is on offer from London Chelsea store with plans to roll it out to a further eight London stores over the summer. The service enables shoppers to order products, and receive delivery in hours. The Co-op has also partnered with Deliveroo to trial home grocery deliveries for its customers, as the retailer looks to explore new convenience market opportunities. This is an exciting opportunity to test consumer reaction and seeks to identify new channels to attract customers and explore innovative partnerships to widen access to Co-op products.

The most significant way we’ve expanded the reach of Co-op is through our wholesaling set up following the acquisition of Nisa and our five-year commercial deal to supply Costcutter Supermarkets Group. We are establishing Co-op food as a brand in its own right outside of our stores by making it available to our Nisa Partners. This expands the opportunity for customers to buy Co-op products and build our presence in even more communities across the UK. In January The Co-op unveiled its move to develop franchise stores, which is the first time the supermarket has licenced its brand to independent retailers. Co-op has been trialling its franchise model since last spring and has just seen its fourth store open and now has the capability to deliver franchising at scale, offering our award-winning food, in new places to attract new customers and members.

What were the highs and lows for your own business in the first six months of 2019?

The team has been working hard to continue to increase the strength of the category and we are delighted to have been awarded convenience chain of the year at the IWC awards for the fourth year running. This award is great recognition for our fantastic range and our passionate wine buying team. Our Co-op Irresistible Fairtrade Organic Malbec was also crowned the best Fairtrade wine which is a great accolade given the work we do above and beyond Fairtrade.

We have also developed our offering of rosés and have added 10 new lines this year, introducing more Provence-style wines, as well as exclusives and introducing well-established brands. Other recent additions include a genuine ‘world first’ for Co-op when we were proud to be the first retailer on the planet to range Studio by Miraval. A real coup for us at Co-op and could only happen when the supplier believes in what we are doing here.

What, currently, are the biggest challenges for the trade?

Due to unexpected weather, both hot and cold, this has meant countries, such as France and Spain have seen their harvests impacted which has been hampering producers ability to maintain wine product quality and taste.

Taking current trading conditions into account, what’s your strategy for meeting those challenges during the second half of the year, leading up to the crucial Christmas trading period?

The team is continuing to deliver the best quality wines at great prices and looking for alternatives to the nations’ favourites. For example our Famille Perrin’s Les Cardinaux which is made with the same blend as Châteauneuf-du-Pape but at a fraction of the price (£10).

We’ve also got out first own brand premium English fizz, Irresistible Eight Acres Sparkling Rosé which has been produced from the ‘Hush Heath’ estate, home of the Balfour range of English wines, due in stores later in the summer. This is sure to be a great alternative to Champagne this Christmas.

What will the focus be on and why?

The team is committed in delivering an outstanding BWS range that is intrinsically linked to what our members and customers need, want and care about; marrying an award-winning own-label range that works in harmony with brands and our regional and local offering.

Our strategy is to remain the number one convenience retailer and extend market share by offering an award-winning and specialist BWS range on the doorstep of our customers and members; growing category conversion by further evolving tailored, customer focused ranges and being famous for occasions and events.

This is part of the business’ overarching ‘closer’ strategy; closer to you, closer to what you need and closer to what you care about. We’ve also made a significant contribution to our Co-op ambition of building a Stronger Co-op and Stronger Communities.

It’s critical for us to be where our customers are. Our new partnership with Live Nation will help Co-op reach new audiences through summer festivals.

Cross-category promotions have been a focus for 2018/19 to offer extra value for our customers. At Valentine’s Day and Mother’s Day, a promotion mechanic on own-label Prosecco and branded chocolate was introduced and merchandised together in stores to meet that gifting mission. Meal deals with alcohol have also been working well outside seasonal events – the most recent being a £7 curry and beer offer.

We’ve recently announced plans to sell only Fairtrade-certified wines in its South African range, both branded and own brand, ensuring all of its South African wine producers get a fair deal. The decision will increase the number of Fairtrade South African wines available in its stores and comes hot on the heels of the our own brand premium Argentinean Malbec being awarded the best Fairtrade wine in the world. This recent product move will see farmers and workers benefit from a Fairtrade Premium, which will allow them to decide how to invest in services that benefit their communities such as education, sanitation and health care as well as investing in climate resilience.

For you, what are the most significant emerging trends in the drinks world?

We are proud to show that we as a business are growing, staying competitive, innovating, and proving that we are a responsible business.

A wide range of beers, ciders and wines are chilled in stores for our customers’ convenience. This includes many of our small wine formats (minis/50cl). Our range of 50cl wine formats have been extended to offer customers some great-quality wines from top producers at an affordable price point and minis in partnership with premium and well-known brands as well as esteemed regions such as Rioja.

Reduced consumption is a growing trend that features strongly in our 2019 strategy. Although it remains a small sector of the market, the insight for future growth of the no/low sector is strong. We continue to lead the way with additions to the range such as Nosecco and 3 low-alcohol Co-op wines, launching in June. We also have a small range of Lower Alcohol wines, with an ABV ranging from 5.5% to 8.5%. We stock a range of branded Non-alcoholic Beers (Bud, Heineken, Becks and Brewdog) and are extending the range this year. We also list a range of Low-alcohol beer: Bud light, Coors light and, from November, Michelob Ultra.

Will you be preparing in any way for a second potential ‘no deal’ Brexit day on 31 October and, if so, how?

We are working with our suppliers to maintain supplies and plan ahead for disruption in the event of a no deal Brexit.

What, for you, would make for a perfect summer?

Good weather!