The Co-operative Group

Co-operative Group Limited

File:Cooperative uniform logo.png
Company type	Consumer Co-operative
Industry	Retail (Grocery), Banking, Insurance, Travel agency, Farming, Motoring, Funeral directors, Pharmacies
Founded	1863
Headquarters	Manchester, England, UK
Key people	Peter Marks, Chief Executive
Revenue	£9.45 billion (-2007)
Number of employees	87,500
Website	www.co-operative.coop

The Co-operative Group is a United Kingdom consumers' co-operative, and the world's largest consumer-owned business, with over 87,000 employees across all its businesses. Regional retail societies are corporate members of the Group.

Formerly the Co-operative Wholesale Society Limited (CWS), the name was changed in 2001 on the transfer of engagements of Co-operative Retail Services (CRS) to the CWS. CWS Retail was formed in 1933 and demerged in 1957 as CRS, with the purpose of opening shops in co-operative deserts and taking over failing retail societies. The Group merged with United Co-operatives, based in Yorkshire and North West England, on 29 July 2007, reinforcing its position as the largest consumer co-operative in the world.

History

The Co-operative Group formed gradually over 140 years from the merger of many independent retail societies changing from a purely wholesale operation to a major retailer in its own right.

In 1863, twenty years after the Rochdale Pioneers opened their co-operative, the North of England Co-operative Society was launched by 300 individual co-ops across Yorkshire and Lancashire. By 1872, it had become known as the Co-operative Wholesale Society (CWS). Through the 20th century, smaller societies merged with CWS, such as the Scottish Co-operative Wholesale Society (SCWS) (1973) and the London based South Suburban Co-operative Society (1984).

However, by the 1990s the Co-op's share of the grocery market had declined considerably and many came to doubt the viability of the co-operative business model. It sold its factories to Andrew Regan in 1994 and he returned in 1997 with an audacious hostile £1.2 billion bid. There were allegations of "carpet-bagging" - new members who joined simply to make money from the sale - and, more seriously, fraud and commercial leaks. Following the employment of a private detective and a subsequent lengthy criminal court case, Regan's bid was seen off and two senior CWS executives were dismissed and imprisoned for fraud. Regan was cleared of charges.

Every cloud has a silver lining and the episode recharged CWS and its membership base and proved to be a catalyst for the rejuvenation which is continuing today. Tony Blair's Co-operative Commission, chaired by John Monks, made major recommendations for the co-operative movement, including the organisation and marketing of the retail societies. It was in this climate that, following many years of aborted discussions, CWS merged with the struggling CRS in 2000.

Its headquarter complex is situated on the north side of Manchester city centre adjacent to the Manchester Victoria railway station. The complex is made up of many different buildings with two notable tower blocks of New Century House and the solar panel-clad CIS Tower, though the society has expressed its intention to move from the site to purpose built accommodation allowing the site to be redeveloped.

Other independent societies are part owners of the Group. Representatives of the societies that part own the Group are elected to the Group's national board. The Group manages The Co-operative brand and the Co-operative Retail Trading Group (CRTG), which sources and promotes goods for food stores. There is a similar purchasing group (CTTG) for co-operative travel agents.

At the start of 2007, the Society began discussions with United Co-operatives, the UK's second-largest Co-operative, on the possibility of a merger of the two societies. On 16 February 2007, the boards of both societies announced that they were to merge subject to members' approval, and on 28 July 2007 the new society came into being.

The Society has also recently transferred the engagements of the small Scottish Nith Valley Co-operative Society which, while trading profitably, was suffering a burden with its pension fund commitments.

Brand

For more information, see the Co-operative (brand)

The former Co-op brand logo

In 2007, the Society began a full-scale re-brand of its operations. The well-known four-leaf clover 'Co-op' brand, which was introduced 1967 and was facelifted in 1993, along with those of most of its other businesses including Travelcare and Funeralcare, is currently being phased out in favour of a new common branding, 'The co-operative', which unifies the Society around a single brand designed to be instantly recognisable whilst attempting to persuade the wider public to re-evaluate the Co-op.

Businesses

The Group now has 85% of the co-operative retail business in the UK and substantial shares in certain wider markets, including travel, funerals and pharmacies.

Food Retail

Division Slogan: 'Good With Food'

The food retail business is the largest division of the Group. Whilst market share has diminished from the peak in the 1950's when the co-operative sector accounted for around 30% of the grocery market, with around 6% today, the Society is still the fifth-largest food retailer in the UK. It operates over 2,200 food stores of various sizes with the biggest geographical spread of any retailer. The stores are mainly in the convenience and medium sized supermarket sector, although some larger superstores remain in the estate.

Following a root and branch review of the business, the society took the decision not to compete head-on with the 'big four' supermarket multiples on range and price in a market that was becoming ever more competitive. It decided to concentrate on smaller stores which were in local communities rather than large out-of-town superstores which was also more compatible with the values and principles of co-operation and returned to the very roots of the movement.

It began to market the ethical stance it took and the co-operative difference. It has been a long supporter of Fairtrade and ethical sourcing. An example is the iconic Co-op "99" brand tea [1], that has now joined all the other own brand hot beverages in becoming Fairtrade.

In addition all Co-operative own-brand health, beauty and household products are marked with an "approved by BUAV" rabbit symbol to show that neither the product nor its ingredients have been tested on animals. Some of the products carrying this symbol include: hair shampoo, baby lotion, toothpaste, mouthwash, fabric conditioner and washing-up liquid.

Distribution

Co-operative Retail Logistics is the distribution business of the Co-operative Group. Distribution centres are located at Alfreton, Birtley, Blaydon, Carrickfergus, Chelston (near Taunton), Coventry (used for deliveries nationwide), Cumbernauld, Eccleshall, Fareham (including satellite chilled distribution centre at Southampton), Halesowen, Harthill, Nottingham, Ossett, Peterborough, Portbury, Thetford, Plymouth and West Thurrock. Barnsley RDC was closed in April 2007.

Travel

The society operates the UK's largest independent travel agency with over 450 branches. The division is currently rebranding to the new co-operative brand from its existing trading names, 'Travelcare' and 'Co-op Travel'. The business also has direct sales channels through telephone and, increasingly, the internet.

Funerals

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Co-operative Funeralcare is the UK's largest funeral director with over 800 branches, many of which retain their private names whilst others operate under the co-operative brand.

Pharmacies

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The co-operative pharmacy is now the third largest chain of chemists in the UK with over 700 branches and is keen to expand further. The branches are currently being converted to the co-operative brand.

Finance

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For many years, the Society's two financial subsidiaries were separately managed. In 2002 they were brought together under an umbrella society, Co-operative Financial Services (or CFS), which is wholly owned by the Group. CFS is made up of the Co-operative Bank, including the award winning Smile internet bank and the Co-operative Insurance Society and has over four and a half million customers.

Farming

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The Society manages over 70,000 acres (280 km²) of land across the UK under the Co-operative Farms banner which are providing an ever increasing number of products, such as soft fruit, potatoes, flour and cider, to Co-operative food stores allowing the society to further differentiate itself from competitors.

Legal

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The Society announced the formation of a new division, the Co-operative Legal Services, in April 2006, to be based in Bristol.

Property

The Society maintains a successful property business that manages an investment and trading property portfolio.

Corporate Clothing

The Society owns Mandate who make the staff uniforms for the Co-operative Group and other businesses. The business is to be rebranded Co-operative Clothing.

Motor Retailing

In 2005, the Society sold Priory Motor Group, a car retail business. Reg Vardy purchased the majority of the dealerships in the North East region.

Following its merger with United Co-op, the society once again operates car dealerships under the 'Sunwin Motors' brand. There are currently 20 dealerships in Yorkshire, Lancashire and the East Midlands. These consist of 6 different Manufacturer Franchises including Land Rover, Renault, Nissan, Peugeot, Fiat, Mazda and Hyundai.

Land Rover is still trading as Farnells after Sunwin Motor Group purchased the Guiseley and Bradford dealerships from Albert Farnell. Although every now and then offers and its main website is branded as Sunwin.

Sunwin Aqquired Motor Dealerships in Derby, Nottingham, Mansfield, Ilkeston and Loughborough from Ilkeston Co-op Motor Group in 2004 for an undisclosed sum.

Sunwin's Renault Dealerships are in Bradford, Blackpool, Preston, Keighley, Nottingham, Derby and Mansfield, although they do have a Renault Minute Service Centre in Ilkeston. Nissan Dealerships are in Ilkeston, Nottingham, Derby and Keighley. Peugeot Dealerships are situated in Ilkeston and Keighley (Sunwin did previously also have Peugeot Halifax, although this was recently sold to Dews Motor Group). Sunwin owns 2 Mazda Franchises in Loughborough and Derby. Sunwin has just 1 Fiat dealership and 1 Hyundai site in Derby.

Of all the Sunwin Sites, Derby site is the largest with 5 franchises (Renault, Nissan, Fiat, Mazda, Hyundai and an Any Make Any Model service centre.

Sunwin Motor Group also has 2 Renault Business Centre's: Bradford and Derby look after various types of small businesses and large fleets, including accounts with major funders.

Former businesses

The old Co-operative warehouse behind the Gateshead Millennium Bridge in Newcastle upon Tyne.

Engineering

Syncro was the rebranded engineering and building services business of the Co-operative Group, based in Salford. Syncro was sold in 2006.

ACC

Associated Co-operative Creameries was the Group's large milk processing and distribution division. ACC also handled logistics of the retail business but this responsibility was given to a new department, Co-operative Retail Logistics, prior to sale. The division was sold to Dairy Farmers of Britain on 10 August 2004.

Non-food retail

The Group decided to withdraw from the department store business following many years of increasing losses, with several of the stores being acquired by the Anglia Regional Co-operative Society, and the remainder being closed. Many of the shops had been in poor locations and had suffered from years of under-investment. Initially, two stores were to be retained in Perth and Tunbridge Wells as a trial of a new style of department store but it was decided to close these in 2006.

However, the Group continues to operate a growing internet business retailing electrical goods and designer beds, as well as providing electrical buying, warehousing and distribution services to the wider co-operative movement, as many of the independent societies continue to operate in non-food retailing.

Footwear

Shoefayre was established in 1959, initially known as Society Shoes. For many years it was co-owned by several co-operative societies but eventually became wholly owned and managed by the Co-operative Group. In 2006, it reported operating losses of £6 million and in 2007 was sold to rival shoe retailer Shoe Zone.

Dividend

Membership scheme logo

The idea of co-operative trading revolutionized food retailing with the dividend, often known as "divi", and the "divi number" becoming an integral part of British life. The way in which co-operative retail societies are run for the benefit, and on behalf, of their members is something which sets them apart from their modern-day competitors. The dividend, conveying a financial reward to members for trading with a society based on a member's level of trade with the society, and thereby distributing profits on the basis of turnover not capital invested, is a fundamental difference between a co-operative and enterprises that distribute profits in proportion to capital invested, that is most private sector enterprise.

Historically, members' sales would be recorded in ledgers in society's stores and at the end of the collection period a proportional payment would be made back to the member. As societies grew, and with it the number of members, the method of using ledgers became cumbersome. As a solution, some societies, including Co-operative Retail Services, started to issue stamps to members for qualifying transactions. Members would collect the stamps on a savings card and, when the card was complete, would use it as payment for goods or deposit into their share account.

By the late twentieth century the Co-operative Group's precursors and then the Co-operative Group were no longer paying true dividend (it had become a drain on limited resources), although several independent societies continued to do so. In the late 1990's a loyalty card scheme, in the style of the Tesco Clubcard, was introduced which used the Dividend brand. Ironically these loyalty cards aped the original co-operative dividend but were little more than marketing exercises as well as a way to gather useful customer information. Co-op customers (not just members) could sign up and receive a swipe card to record their purchases with vouchers being sent out twice a year which could be exchanged for cash or goods.

However, in September 2006 the Co-operative Group relaunched "true" dividend whereby a proportion of the profits of the Co-operative Group are returned to members. True dividend is the sole benefit of Society members. To emphasise this point, the scheme is now called the co-operative membership and members earn a 'share of the profits' rather than 'dividend'. Improvements have been made so that members can earn their share of the profits throughout the family of businesses including the food stores, Co-operative Bank, CIS, travel, pharmacy and funeral branches.

Society membership has increased sharply to nearly four million with many more younger people being attracted to join who have an affinity with the co-operative values and principles.

In 2007, the Oxford based Midcounties Co-operative joined the Group's membership scheme allowing its members to earn dividend at Co-operative Group stores and vice versa. They have also adopted the new Co-operative branding, the first of the independent societies to do so, though it is hoped that others will follow in due course.

Co-operative practices

The Co-operative Wholesale Society's building in Manchester.

As a co-operative, the Group places importance on ethical and transparent trading and reporting, and democratic accountability and participation. Trading areas are overseen by 15-member Area Committees which have annual elections and meetings for all members. These elect members onto regional boards, which also meet annually to report to all members in the region. A national board includes directors elected from regional boards, plus representatives of other societies. Individual stores may have member forums also.

As the UK's largest co-operative, the Group plays a key part in the co-operative movement. It is the biggest subscriber to Co-operatives UK and the Co-operative Party, with members electing representatives on to local Party units. It is also a major sponsor of new co-operative ventures, local initiatives through Co-operative Action and Fairtrade promotion.

Awards

• The society gained Worldaware's 2002 Shell Award for Sustainable Development for its use of Fairtrade goods.
• In 2007, the society won a Queen's Award for Enterprise in the Sustainable Development category, in recognition of its business practices, including its pioneering stance on Fairtrade and the environment.

See also

• Co-op UK
• Coop

External links

• Official website
• Coop Travel shop - One of the Co-operative Group Holidays & Travel Websites
• Coop Cruise Shop - One of the Co-operative Group Cruise Specialists
• Sunwin Motors - Part of the Co-operative Group