HFSS scheme does not impact profitability, says Southern Co-op

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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. 

The trial, which began in March and took place over a 16-week period in Romsey, saw five stores with three different format types adapted to become fully compliant with the new scheme. 

The goal of the trial reportedly was to develop an understanding of the impact of HFSS regulations on customer behaviour, the costs associated with new formats and the overall impact upon profitability. 

Removal of HFSS products from impulse locations such as dump bins near tills and queuing areas was expected to have the largest impact, However, no such effect was observed. 

 Although profitability was not affected, Southern Co-op admitted that the additional costs involved in adapting stores to make them fully compliant would be the second-largest capital expense to the business in 2022. 

Southern Co-op’s news comes amid speculation that the new prime minister Liz Truss is contemplating to scrap HFSS restrictions under anti-obesity drive. The new restrictions are set to roll out in October which will see HFSS products banned from stores’ locations such as aisle ends, store entrances and checkout areas. 

Apart from HFSS restricitons, Truss is also planning to do away with sugar tax. According to The Times, Truss is preparing to scrap sugar taxes on soft drinks and ditch some anti-obesity measures to ease the cost-of-living crisis in the country.

In an August interview with the Daily Mail, Truss said she would scrap plans to restrict multi-buy deals on food and drink high in fat, salt, or sugar and would not impose any new levies on unhealthy food.

“(People) don’t want the government telling them what to eat,” Truss said.