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Co-op reports record growth as market share soars

Published:  27 July, 2020

The Co-Op has reported record sales over the past quarter, with the fastest share growth in the grocery retail industry for the 12 weeks to 14 June (Kantar). Sales are up 29.1%, bringing their market share to 7.4% – their highest since 2001.

A shift in buying habits towards local shopping and higher basket spend has helped sales of BWS at the retailer where wine has grown by 20%. Beers and spirits meanwhile have shown a massive increase at 41%. Overall, that’s a value sales growth three times greater than the market average.

In a candid interview for Harpers, Simon Cairns, head of drinks at the Co-op, told us how he and his team have been coping, along with his wider views on the industry, and how the last four months have altered his perspective on our trade.

“Firstly, I have to congratulate not only my buying team, but our supply chain colleagues, who are at the forefront of the most important part of our business right now – keeping stock on the shelves amidst this unprecedented situation. The guys in the stores, who are at the frontline have made huge sacrifices, and are getting some of the recognition that they deserve. They are a key part of the service that customers need. That should never be underestimated.” he said.

Cairns emphasised the absolute focus on fulfilling demand: “Demand is ludicrous, and we have been pulling out all the stops to meet the challenges. Everything is so fluid, our mission is not to compromise, whilst getting hold of stock, so we have had to bring in new lines to meet demand. We have never worked more closely with our supply chain colleagues, and that in itself has changed our way of thinking. We are bringing in as much stock as possible.”

He also stressed that there had been no strategic decision to switch focus between wine categories. “We are simply buying more of everything. It’s all about how we get stock and expedite it. We have done everything we can to stockpile. Obviously our stores have less storage space, so efficient delivery systems are vital.”

For total grocery at the Co-op, depot deliveries have risen from an average weekly 10.5 million cases to a staggering 12.5 million. The business has been winning customers from its competitors, taking £87m from the big four, and £23.4m from discounters, based on the latest Kantar report. Customer penetration has increased by almost 14%, as consumers shop more locally.

The mix of sales and purchasing strategy has also altered radically. “One of the biggest challenges we have faced has been the switch from high frequency, small basket purchases, to lower frequency, higher basket shopper missions, literally overnight. This has meant that we have had to be really proactive in terms of sourcing products, that would not normally be stocked in our stores,” Cairns said.

Sales of large formats such as 24 pack beers, a pack size never ranged before, have rocketed, whilst demand for bag in box, has grown by over 60% year on year.

Sparkling wine sales have also bucked the market trend. Based on IRI data, for the 12 weeks to 4 July, Champagne sales at the Co-op rose by 23% against a total market decline of 4.5%, whilst sparkling was up by 11% against a total 6% drop.

UK packed wine has proved a huge benefit. The majority of the business’s own brand wines are now packed at Kingsland, with around 65% of branded wines also UK packed. Once again, flexibility has been crucial with the switch to prioritising bag in box, whilst keeping the production lines going. Cairns emphasised that shipping in bulk also brought many other benefits. It’s an easier, swifter process at the wineries to get product onto ships; and during the current surge in demand, it also slightly eases the pressure on volume. Twice as much volume can be brought in bulk in one container than bottled stock.

Cairns echoed the thoughts expressed by many suppliers, emphasising the focus on total collaboration. “These are exceptional times, it’s all about relationships – open conversations,” he said.

With the closure of the hospitality industry, the Co-op has worked closely with suppliers to re-route products destined for the on-trade, to meet customer demand and avoid liquid going to waste. In this vein, the company has teamed up with Matthew Clark to utilise some of their fleet of trucks to deliver beer direct to stores, working in collaboration, saving crucial time and depot space.

“No one is ever going to achieve the perfect fit, but we are doing the best within this chaos. In some ways, this has turned our world upside down in a positive way. We have all had our eyes opened,” said Cairns.

The Co-op’s buyers are all working from home, but have never been closer to their producers. According to the team, they are talking more, tasting tank samples together on Zoom calls and blending together. “There has never been more regular and direct dialogue with winemakers. It’s working really well. It has changed the way we are thinking about how to maximise our relationships with trusted suppliers,” Cairns said.

At the end of our interview, Cairns made a final philosophical comment: “This crisis has given me an entirely new perspective. Historically, we have just considered the off-trade, [whereas] now, I’m looking at the total picture. Off- and on-trade are both facing similar complications. There are more synergies. We need to work together, not in isolation, and embrace this.”

Could this be the start of a brave new world within our industry? In this almost dystopian society, let’s keep those embers of hope and change burning.


Co-Op market share is at its highest since 2001, at 7.4% and growing at three times the market average. Wine overtrades at 10%.

Champagne and sparkling wine sales are soaring.

Beer and spirit sales are up by 41%.

The trend is for less frequent shops, higher basket spend