The Co-operative Group

Co-operative Group (CWS) Ltd

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Company type	Consumer Co-operative
Industry	Retail (Grocery), Banking, Insurance, Travel agency,Farming, Motoring, Funeral directors, Pharmacies
Founded	1863
Headquarters	New Century House, Manchester, UK
Key people	Peter Marks, Chief Executive
Revenue	£9 billion (-2007)
Number of employees	87,500
Website	www.co-op.co.uk

The Co-operative Group, the trading name of Co-operative Group (CWS) Ltd, is a United Kingdom consumers' co-operative, the world's largest consumer-owned business. Co-operative Group (CWS) Limited was formerly called the Co-operative Wholesale Society Limited but the name was changed in 2001 on the transfer of engagements of Co-operative Retail Services to the Co-operative Wholesale Society. The company officially amalgamated with United Co-operative on 29 July 2007, this reinforced the groups 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, and their wholesale societies and federations. 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 South Suburban Co-operative Society (1984).

By the 1990s, CWS's share of the market had declined considerably and many came to doubt the viability of a co-operative model. CWS sold its factories to Andrew Regan in 1994. Regan returned in 1997 with a £1.2 billion bid for CWS. There were allegations of "carpet-bagging" - new members who joined simply to make money from the sale - and more seriously fraud and commercial leaks. After a lengthy battle, Regan's bid was seen off and two senior CWS executives were dismissed and imprisoned for fraud. Regan was cleared of charges. The episode recharged CWS and its membership base. 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, in 2000, CWS merged with the UK's second largest society, Co-operative Retail Services.

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.

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 Retail Trading Group (CRTG), which produces and sources goods for the supermarkets of most of the societies under a common brand. 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

The Co-op brand logo (Non Sales)

In 2007, the Society began a full-scale re-brand its operations. The well-known 'Co-op' brand, and those of most of its other businesses including Travelcare and Funeralcare, are to be accompanied with a range of common branding. This common 'The co-operative' branding unifies the Society around a single brand designed to be instantly recognisable, which ties in with the Society's new group-wide Membership scheme but this will only be used in sales centres and all original logo's are to be kept for the time being.

Businesses

The Group has 25% of the co-operative retail business in the UK and substantial shares in certain wider markets, including funerals and pharmacies.

Food Retail

The food retail business is the largest division of the Group. Market share has diminished from its glory days in the 1950s when the Co-operative sector accounted for 30% of the market. However, with 5-6%, the Society is the fifth-largest food retailer in the UK. The Society operates over 1,700 food stores across the country. Its stores are categorised into three sizes: Welcome convenience stores; Market Town small supermarkets; Superstores full-scale supermarkets. Previous names of the stores that did not obtain the name 'Co-op' were 'Co-operative', 'Co-operative Pioneer', 'Leo's' and 'Stop and Shop' however these were all dependent on the location of stores around the UK.

The Society does not endeavour to compete with the 'big four' supermarkets on range and price. Instead, it markets its ethical stance and co-operative identity. It has been a long supporter of Fairtrade and ethical sourcing. Co-op "99" brand tea is a fairtrade-like brand [1]. The leaves used are from plantations monitored for employees' working and living conditions, local services and recreational amenities. In addition all Co-operative own-brand health and beauty products are marked with an "approved by BUAV" symbol to show that the product is not tested on animals or containing ingredients obtained through cruelty. Some of the products carrying this symbol include: hair shampoo, baby lotion, toothpaste, mouthwash, fabric conditioner and washing-up liquid.

Travel

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

Funerals

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Co-operative Funeralcare is the UK's largest funeral director with over 600 branches.

Pharmacies

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The co-operative pharmacy, the trading name of National Co-operative Chemists Limited, is one of the largest operators in Europe with nearly 400 branches in the UK. The chain is currently being converted to the '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 with the smile internet bank and the CIS Co-operative Insurance.

Farming

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The Society manages over 85,000 acres (340 km²) of land across the UK under the Co-operative Farms banner.

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 investment and trading properties.

Motor Retailling

The Society operates car dealerships under the 'Sunwin Motors' branding, with 22 dealerships in Yorkshire, Lancashire and the East Midlands.

Former businesses

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

Motor retailing

The Society sold Priory Motor Group, a car dealership business, in 2005; Reg Vardy bought the majority of the dealerships. As mentioned above, however, the Society returned to the market when the Sunwin brand was inherited from United Co-operatives as part of the merger.

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 Society has sold the department stores of the former CWS estate. CRS withdrew from the non-food market a couple of years prior to merger. The Society kept two stores open as a trial of a new style of department store but these stores were closed in 2006. It does, however, operate a growing internet business, in conjunction with United Co-operatives, retailing electrical goods and designer beds.

Footwear

Shoefayre was established in 1959 retailing shoes. Initially, it was a co-operative co-owned by several societies but eventually became wholly owned and managed by the Group. In 2006, it reported operating losses of £6million and the Group sold its 283 high street footwear stores to rival operator, 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 and had become a loyalty card scheme which other retailers had introduced, apeing the original co-operative dividend. In 1998 customers (not just members) were given a card to record their purchases. Vouchers were sent out to the cardholders twice a year which could be exchanged for cash or goods.

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 'your share of the profits' rather than 'dividend'. Improvements have been made so that members can earn their share of the profits in the Society's other trading operations such as the Co-operative Bank, CIS, travel, pharmacy and funerals.

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. In 2004, the traditional "divi"—a dividend for members in the supermarkets—returned to distribute profits from all parts of the business to members.

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.

Mergers and acquisitions

The Society has produced an on-line database of all past merges and acquisitions of all co-operative societies in the UK. Members with a share account of a former society can find out to which Society it now belongs.

Awards

• The Society was awarded the 2002 Shell Worldaware Business Award for sustainable development.
• In 2007, the Group was awarded the prestigious 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