In January of this year, the Co-op announced the end of its rewards scheme which gave a cash discount on Co-op branded products purchased plus the same amount to a nominated charity of the customers choice that had been arranged on their website. They are now setting up a master financial national system so charities do not lose out, but I am not sure how this will work. I took advantage of donating my entire rewards balance to my nominated charity.
Since the demise of the rewards system, mention is made of dividend points, but these are said to carry no financial value, so what on earth are they for?
Couple of points
1 - it was never a cash discount on branded products, it was 2% accrued into an online wallet which could then be redeemed when the customer chose
2 - the Coop is under unprecedented pressure on price *, and they see this step as being necessary to try and support prices
3 - they have a plan for the charity support going forward, and having spoken to someone who knows some of the detail it sounds good
4 - traditionally the Coop paid out a divi and it was pro-rata to spend; it could make a reappearance but I’d say it was unlikely
* the most geographically diverse store estate including Scottish islands, Scilly Isles, Northern Ireland etc; the smallest average store size of all the major players; trying to maintain an extensive range which means average sales per product per store per day is lower than anyone else’s; all this adds up to a higher cost to serve than anyone else.
(As a guide on the slow moving range, when we implemented SAP there was a module that could alert for potential gaps on shelves but stock out the back, where there was a positive stock quantity on the system but no sales for 30 / 45 / 60 / 120 minutes so possibly an empty shelf, but the analysis showed only one product - 2 litre semi skimmed milk - sold quickly enough to make it worthwhile. For everything else sales were so slow that the system would endlessly throw out false alarms)