“What’s that coming over the hill is it a monster? Is it a monster?” was the interminably repeated refrain of a pop hit of a couple of years back by a group called The Automatic. For me, it was one of those subliminal lyrics that stuck in my head for a very long time!

Although I thought I had rid myself of the “monster” song something brought it back with a bang recently, and that something is The Co-operative Group. I attended a presentation given by its chief executive, Peter Marks, and it was apparent that his organisation is likely to pose a major expansionary threat coming over the hill for the wholesale/independent channel.

He was giving the keynote address last month at IFE09 – the international food and drink event held every two years at ExCel in London. A thoroughly engaging and candid Yorkshireman, he had an extraordinary story of corporate success to tell – even in these troubled financial times.

He acknowledged that the Co-op had in the past been a factional affair that had never worked properly. “We had lost the plot, but have now got it back together again,” he said. And the bare facts speak for themselves. The group has consolidated 80% of the Co-op movement into one focused organisation and expects to make that 100% before too long. It has posted 12 successive quarters of like-for-like growth.

Last month saw the completion of its pivotal pound;1.56bn acquisition of the Somerfield supermarket chain – a deal that propelled it into the ‘Premiership’ of food retailers at fifth place in the UK grocery market with an 8% share and 3,000 stores generating annual sales in excess of pound;7bn.

Also, last month the Federation of Wholesale Distributors collaborated with the Association of Convenience Stores to respond to the Competition Commission on its Grocery Supplier Code of Practice consultation. This was generally supportive of a robust code, effectively policed by an ombudsman. It was therefore extremely disappointing to hear Peter Marks say that the appointment of such an ombudsman was, in his view, unnecessary. Let us hope that as “an ethical business based on honesty and integrity”, this new industry giant will nevertheless welcome and accept the actual provisions of the new code.

Somerfield will take up to two years to integrate and re-brand. And it will take some time to tidy up the Co-op’s balance sheet by paying down the debt taken on for the acquisition. But then, watch out everyone.

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