Owned by individual isn't the same thing. Whoever owns the IGA still has an interest in making a profit. A Co-op is like a club where the store is owned by club members. The idea is the store sells everything at/near cost price.
Whether your co-op can buy cheaper than Colesworth retail prices is a different matter.
The Government however can in theory buy products at enough scale to be at a comparable wholesale price to Colesworth - and if they start selling at/near wholesale cost price, it can put pressure on the duopoly to actually compete.