The £1.57 billion merger of the The Co-operative Group and Somerfield is the “biggest structural change in the UK for five years”, international grocery analyst IGD has claimed.
The move will create a lean business that is well-placed to capitalise on emerging consumer and economic trends, it said.
Louise Spillard, IGD director of research, said it is “quite literally a big deal for food and grocery in the UK”, which will create the fifth-largest food retailer.
She said: “Both organisations have made great strides in efficiency in recent years, through very different steps. At a time of economic flux, the new business is a good strategic fit, with similar customers, stores and product ranges. The new business is well-placed to capitalise on trends we have identified in the UK market, particularly shoppers’ increasing appetite for top-up convenience shopping, local shopping, and for ethical foods.”
Four out of five UK shoppers show an interest in ethical factors, and three in five act on these when deciding what goes in their shopping basket, compared to just one in five for whom ethics plays no part, according to IGD’s Ethical Shopping report.
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