Price war continues with Co-op to splash £125m on fruit and vegetable price cuts

Co-op to halve prices and close larger stores as pressure builds

 

Coop 1978

A Co-op store in 1978

The change in grocery shopping habits witnessed over the last four or five years has seen giants such as Tesco and Asda struggle to remain relevant, as upstarts like Aldi and Lidl have sprung up in towns across the UK.

Large out of town sites owned by the big supermarket chains are declining in value, as consumers have are increasingly taking their business to smaller high-street shops and discount chains.

The reaction from the established retailers has been to compete on price.

This so-called price war has left suppliers to supermarkets in “devastation”.  In April, insolvency firm Begbies Traynor warned that over 1,400 producers were in “significant” financial distress, and were “locked in a David and Goliath battle, but this time David can’t win”.

The latest skirmish in the bid to woo customers comes from the Co-op, which has announced it will commit £125m to price cuts to fruit and vegetables in its 2,800 supermarkets.

The investment will halve the price of over 100 common items.

In addition it is looking to ditch larger stores and focus on the convenience market.

The move follows Morrisons’ similar move last year, when the retailer said it would invest £1bn in price cuts.

Co-op retail chief executive Steve Murrells said: “Consumers are shopping differently, buying little, more frequently and, increasingly swapping the weekly shop for purchasing what they need, when they need it.

“Food retailing remains highly competitive and we have responded to provide customers with great prices and fresh, quality produce at each of our stores. This makes our price investment the biggest by a convenience retailer, providing consumers across the length and breadth of the UK with lower priced produce and helping them to keep shopping in their neighbourhood.”

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