Coco di Mama has unveiled a range of freshly prepared Italian sourdough sandwiches within Tesco's premium meal deal as it places its bets on the grocery sector.
The move comes after a "hugely successful" inaugural year in retail through its offering in Sainsbury's £5.50 meal deal, as reported by .
Managing director Jim Atwood explains that "Capital-light, fast-growing channels," represent the brand's current priority.
"We [have] confidence that there's something in that brand, the packaging, the brand DNA, that the premium but affordable Italian ingredients," he adds.
Coco di Mama initially ventured into meal deals following the pandemic, when the business was "turned upside down", according to Atwood.
The firm began with a single van, circumventing Sainsbury's distribution network and transporting its baguettes and salads across Central London to individual outlets.
"We started off with 10 in central London, where we already had high brand awareness," Atwood explains.
The concept proved so successful in terms of sales that Coco rapidly expanded beyond London: Within approximately six months it reached 140 delivery kitchens across the country, and Coco now operates in 2,200 supermarkets.
The market is 'incredibly competitive'
Coco di Mama's expansion into capital-light business models makes commercial sense: Post-pandemic changes to flexible working patterns, combined with an ongoing cost-of-living squeeze sustained by elevated rents and mortgage rates, has made physical store operations increasingly challenging. Pret a Manger dominated headlines earlier this week after writing down a third of its valuation following the 2018 takeover by European investment house JAB.
The coffee chain blamed the writedown on escalating costs stemming from rising national insurance contributions, alongside persistently elevated interest rates and global economic uncertainty.
Whilst Atwood acknowledges conditions are "much better" compared to the pandemic period and its aftermath, the marketplace remains "incredibly competitive".
Beyond soaring expenses, lingering questions persist over remote working patterns, with staff and management continuing to clash over flexible arrangements.
"[So] pivot the brand into capital lite fast growing channels, which is where we see the medium to long [term]," Atwood says.
"[Maybe further down the line... we might try some store footprint once more, but for the time being, it's retail, delivery, kitchens and travel franchise," he adds.
Taxes pile pressure on hospitality
Last autumn's £20bn fiscal assault particularly wounded the hospitality industry, whilst forthcoming business rates modifications threaten to compound the damage, with London alone confronting a £2bn expense surge.
The autumn hike in employer national insurance contributions (NICs), coupled with the reduced threshold triggering payment obligations, severely impacted businesses dependent on part-time and lower-paid workers.
Redundancies have skyrocketed since autumn, with the industry shouldering "the brunt" of the consequences. The extent of job losses is three times worse than the Office for Budget Responsibility's estimate, which anticipated 50,000 job losses due to changes in employer NICs.
º£½ÇÊÓƵ Hospitality has calculated that the cost of employing a single staff member has increased by £2,500 annually.
"Employment costs have risen significantly," Atwood stated. "We're hopeful that we might see some benefits in the autumn budget around rebenchmarking of rates for High Street businesses.
"It's always been a challenge to run hospitality businesses and it's no easier now than it has been," he added.
Hospitality businesses have faced a series of crises over the past five years, with the energy crisis and cost-of-living crisis following hot on the heels of the pandemic.
However, Atwood remains positive about the future: "Strong brands that are well managed, along with smart decisions and prioritising your capital investment... and above all, striving to provide your guests with an exceptional product or experience... should prevail."
