O2 More, the division of O2 Media that operates its location-based function, passed 2m subscriptions in March, and has signed brands as diverse as Marks and Spencer and Adidas, offering discounts or offers to those close to a store.
The Co-op now has 3,000 stores and the offer will be sent out to people who have opted in and are within a half-mile radius of one of them.
Shaun Gregory, managing director of O2 Media, said: "People have been talking about location-based targeting for years. We've pioneered the capability, delivering a seamless solution across all handsets to opted-in customers who are active participants of our services.
"'You Are Here' is truly unique, primarily because it drives consideration and incremental value in a market where most 'browsing-based' solutions actually erode sales and essentially deliver offers to customers who have already made a purchase decision."
The scheme will be incorporated into cashless payment systems, which O2 and Orange will launch later this summer, and will allow O2 to link location to payments.