Why Calgary Co-op’s local loyalty is so strong

From private label to customizing selection by neighbourhood, the grocer's VP of marketing explains its extensive community approach.

calgary-coop

Calgary Co-Op is a bit of an anomaly in Canada’s grocery business.

One of the few grocery chains remaining not owned by one of the national conglomerates, it operates nearly two-dozen grocery stores, as well as a network of gas, convenience and cannabis locations in and around Calgary. Being a co-operative, it gives members the opportunity to earn equity in the business and pays out profits in the form of cash back and rewards to shoppers, which have helped drive an impressive level of loyalty in a category where that is most frequently driven by geography and price.

But that’s just one part of an approach that ladders up to Calgary Co-Op driving loyalty by being as connected as possible to its communities. That has also included digitizing its loyalty program and accelerating its ecommerce evolution this year, as well as expanding its private label offering – something that has, historically, been hugely important to a grocer’s reputation in Western Canada.

This year, Calgary Co-Op launched two new private label brands, Cal & Gary’s and Founders and Farmers – combined, the retailer now stocks over 800 private label products on its shelves, with more new brand lines currently in development. While Founders and Farmers has a bit more of an artisan feel, Cal & Gary’s is positioned as being geared towards “the tastes of Calgarians” – whether that be in the form of locally sourced products or global cuisine they are interested in – although Co-Ops roots in its home city are something Penney McTaggart-Cowan, VP of marketing and member experiences, says it tries to reflect across its brands and stores.

Strategy spoke with McTaggart-Cowan to get her thoughts on the grocer’s approach to private label, the benefits of its business model and other ways it is enforcing its ties to the communities it serves.

How is Co-Op’s approach to private label different from offerings from the competition?

Some retailers treat their offerings as purely a private label and copy the national brands. At Calgary Co-op we’ve developed brands that have a clear purpose and deliver a deeper connection. When we were developing our two new private brands, we listened very carefully to our members and they were very clear: they wanted a unique assortment of products that had good quality and value for their money. Our new private brands have been carefully curated to our member’s tastes.

Prior to the pandemic, many believed the grocery of the future was a small  footprint location with on-the-go offerings to accommodate a time-strapped demographic. What does the future grocery store look like for Calgary Co-op? 

We anticipate grocery stores will continue to evolve their offerings to provide consumers with healthy, convenient meal solutions for time-strapped families. Consumers are seeking restaurant quality and culinary adventures with ethnic options as part of these programs. The pandemic has impacted the delivery of some of this assortment, but through innovation in packaging and self serve opportunities, grocery stores will continue to evolve to address consumers’ needs for meal solutions, beyond just the weekly grocery shop.

There is also opportunity to better customize assortment by neighbourhood, aligning to cultural influences and other characteristics. This is critical for relevance at the local level and retailers that can cost effectively adapt in this way will win in their respective markets through smaller footprints, unique assortments and programs. The key will be ensuring delivery of consistent brand and customer experience.

What’s membership growth been like of late? Have you had to temper expectations? 

We always balance our business planning to ensure we focus on the long term sustainability of our cooperative and the continued payment of patronage and equity. In 2020, members earned $24.5 million, which Calgary Co-op paid out as 2% on all their retail purchases and four cents a litre on fuel. Through the pandemic, we attracted new members who valued our investment in providing a safe and clean shopping environment and support for almost 200 local producers.

We also provided “Care Packages” free of  charge to any household affected by COVID, either through self isolation or as part of a  vulnerable population and who were not able to shop for themselves. All of these activities resonated strongly with the community and attracted new members and reinforced the pride of membership among our current longstanding members and team members.

What does it take to survive in a market against big consolidated grocers?

To best answer to that would be to describe what a co-operative is: we are proudly owned by our members and serve our communities – we are not up for sale, but here for the long term service of our city. The model has been the very foundation of Calgary Co-op for nearly 65 years. Our members are owners, all of our team members are owners, so we all have a huge stake in how our co-operative does and we are all committed to ensure its long term viability. Our members are very loyal and many have been shopping with us for decades and know their member number by heart.

Our members are also very committed to our community and regularly communicate to us how they would like to support it. Last year we were able to donate $2.2 million to our charitable partners on behalf of our members.

I’d like to get a sense of how click-and-collect is faring for the brand, and what it anticipates will be the case going forward? 

In late 2019, we initially launched online shopping for our wine, spirits and beer business, and in response to COVID, we expedited our journey into ecommerce for food. With the ever growing online assortment, members have embraced this new way to shop at Calgary Co-op. We include a thank you note and free item in every food order and continue to surprise and delight our online shoppers.

We also expanded online shopping to our cannabis business. We anticipate with the rapid adoption of digital as a result of the pandemic, these channels will continue to grow and attract new members to  our cooperative.