Co-op to invest £300m in stores this year

THE Co-operative Group is to ramp-up investment in its convenience stores this year as it strives to build on a strong start to 2014.

Steve Murrells, chief executive of retail, told TheBusinessDesk.com that around 1,000 shops – representing around one third of the estate – would receive some kind of refurbishment or refit this year, alongside investment in new own-brand product and people training.

“For 2014 we are putting our foot firmer on the pedal, meaning providing better products, better prices, stores and staff.”

In total capital investment will be around £300m, “a significant increase” on the 2013 figure, Mr Murrells revealed.

He was speaking after the group – which is the UK’s biggest convenience store operator – reported strong quarterly trading figures.

The former Tesco and Tulip Meat executive who joined the Co-operative two years ago, said the programme of store improvements would be operated along a “self fund model”, with finance coming from operational efficiencies and from the sales of the larger stores.

“We won’t have to go to the market to raise the money to invest, so there is no strain on the group. We are driving costs out of the business, which has been a fat operation previously.”

He said there would be closer operational integration between the three retail businesses – food, pharmacies and electricals – to achieve savings too from the supply chain through combined buying power.

Mr Murrells said though the closer integration would not mean that pharmacies would be opened in the food stores- because the size of the convenience outlets would preclude such a move.