Southern Co-op has revealed that its in-store trial, which put the upcoming regulations on products high in fat, salt or sugar (HFSS) to the test, saw no change to its overall profitability.
Running over a 16 week period from March, the trial looked to understand how new HFSS rules would impact customer behaviour, added costs and to what extent profitability would be affected.
This came following the government announcement that new restrictions set to roll out in October will see HFSS products banned from supermarket locations such as aisle ends, store entrances and checkout areas.
To trial this before the regulations came into play nationwide, the independent co-operative implemented its three fully compliant format types across five stores in Romsey.
Despite the expectation being that removing products from key store areas would impact profitability, Southern Co-op confirmed this was not the case.
“Although we saw behavioural changes in the store, our overarching profitability stayed exactly the same,” Southern Co-op head of trading and format, Andrew Farndell told The Grocer.
“In an inflationary market where margin is everything, actually our margin was absolutely what it was pre-trial.”
Although profitability was not affected, according to The Grocer, Southern Co-op said the additional costs involved in adapting stores to make them fully compliant would be the second-largest capital expense to the business in 2022.
This news comes as the UK government may scrap all of its anti-obesity strategies and cancel planned restrictions on pre-watershed HFSS ads.
