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Co-op plans further logistics investment as it grows ecommerce operations

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The Co-op is planning further logistics investment as it grows its business and ecommerce operations, despite being hit hard by supply chain challenges this year.

“The last year has seen us facing some significant challenges, including significant supply chain issues in the second half coming at the same time as our food business transformation and increasing inflationary pressures,” said Shirine Khoury-Haq, interim chief executive, Co-op.

The difficult operating environment disproportionately impacted our Food business, given its focus on the community convenience market, with an operating model that is more reliant on flexibility in the supply chain.”

But she said that the business remains uniquely positioned and had continued to invest regardless. The second half saw significant investment into its logistics network to support availability and future growth, with the company’s biggest regional depot in Biggleswade.

The company also has plans to construct a new facility alongside its Newhouse depot in North Lanarkshire this year.

The Co-op also focused heavily on ecommerce expansion, more than doubling revenues in its online business to £200m, through the website and partnerships with Amazon, Starship and Deliveroo (2020: £70m) (2019: £4m).

Ecommerce is now available across 1,600 stores, in more than 450 locations, accessible to over 55% of the population. The Co-op is also looking to expand a successful trial with Amazon Prime this year, with an ambition to grow the offering to serve 26 million shoppers.

It said it has also achieved the fastest rollout of micro distribution hubs – more than doubling its ultra-fast grocery delivery services to 2,000 stores and reaching three-quarters of the population.