Last updated: June 2014
Co-operatives are alive and kicking
Far from being knocked out by the crisis at the Co-op Group, the UK’s co-ops are fighting fit says Simon Birch.
It has been, to say the least, an annus horribilis for the Co-op Group. With scandal-strewn headlines and eye-watering financial losses, the business that was held up as being the flagship of the ethical economy has taken such a severe battering that many are speculating if the co-operative way of doing business can ever recover its reputation.
Well the good news is that whilst the Co-op Group itself may be struggling to get back on its financial feet, the co-op economy is actually defying its critics and is positively blooming.
According to Co-operatives UK, the trade body for the co-op movement, while the UK economy was bumping along in recession between 2008 and 2012, the number of co-ops grew by 28 per cent to over 6,000, with turnover jumping 23 per cent to over £6 billion.
Growth has been especially strong in those sectors where public trust is at record rock-bottom low levels, namely energy and food. The dramatic growth of Co-op Energy is just one of the co-op economy’s good news stories.
Launched just three years ago, by 2013 Co-op Energy, which is wholly-owned by its customers, saw sales rocket by 243 per cent with 70,000 new customers signing up to the business that now serves over 200,000 households.
The business is part of the Midcounties Co-operative Society which itself recently posted record annual sales of £1.17bn and which now plans to share a £6m dividend with its members and staff.
“These excellent trading results demonstrate that the co-operative business model really works,” says Midcounties Coop CEO Ben Reid. There’s been similar strong growth in co-ops operating in the food industry.
West Yorkshire-based Suma Wholefoods co-op has just had its best ever year after making almost £1m profit on its £34m turnover. Sales at Suma, which was started almost 40 years ago, have doubled in the past decade, driven by a fifteen-fold increase in exports. This has led the business to run a night shift for the first time, but with everyone able to choose their own hours, this has been easily done.
“British food products are in demand,” says Bob Cannell who’s responsible for human resources at Suma, which is one of Ethical Consumer’s Best Buy companies. “The UK has very high standards of food safety regulation. Over here British people see it as a barrier but it’s actually an aid to export.”
Former music-business executive Paul Collins, who’s worked at Suma for the past 10 years, outlines Suma’s business philosophy which is about more than numbers: “We have a triple bottom line that’s people, planet and profit,” says Collins. “Put simply, Suma is an organisation that’s run on ethical lines, which values its customers, who are mainly small independent retailers, and its members first, rather than faceless shareholders or a small number of rich owners.”
Record trading levels
It’s the same picture up and down the country with wholefood co-ops such as Unicorn in Manchester reporting record trading levels. There’s further good news for the co-op movement with the results of a survey that was commissioned by Co-operatives UK to gauge the impact that the unfolding crisis at the Co-op Group may have had on the reputation of the co-operative business model.
“The key finding is that this was all seen to be about one specific business,” says Ed Mayo who heads up Co-operatives UK. They will be looking to further reinforce this positive message throughout Cooperatives Fortnight which runs from 21 June to 6 July.
“On balance, we are still seen in a very positive public light,” says Mayo. “We fit the concerns of our time and our challenge is to live up to this potential: to be the business that people want and to win their custom and loyalty for the quality and integrity of what we offer.”
Mayo concludes by adding: “We now have to live up to our own promise.”
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