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Co-op to invest £70m in food logistics network

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Mutual model retailer The Co-operative Group has announced that it will invest a further £70 million to complete the upgrading of its food logistics network.

During the last year much of the integration of the Somerfield business was undertaken leading to unprecedented change to the retailer’s supply chain.

The transition process, which has seen the former Somerfield depot at Lea Green, near St Helen’s incorporated into the business, should now be completed in 2011.

At the end of last year Co-op announced the construction of an new distribution centre in Avonmouth near Bristol, and work will begin on the site next year with completion expected in early 2012.

Responding to the full-year results published by the retailer yesterday, Peter Marks, Group CEO for the Co-op, reflected on the outlook for the next 12 months.

Marks said: “During 2011 we will still be a business in transition, however, all the work done over the past three years means we are in good shape to continue to weather the downturn and make the most of opportunities when the economic situation improves.”

Trading last year was reportedly affected by the integration plans but group sales still managed to grow by 9.1 per cent over the 12 months.

Food was the most affected area of the business due to the Somerfield conversions with like-for-like food sales down 2.5 per cent year-on-year.

With the roll-out of the Stock Management and Replenishment Transformation scheme now undertaken, Marks is confident that the food business will be ready to flourish in 2011.

“We will continue to set ourselves challenging, but achievable targets for both our business performance and our social goals because that is what our members ask for and expect,” Marks continued.

“It is that drive and ambition for excellence that I believe will ensure our long-term success.”

Published on Thursday 31 March by Editorial Assistant

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