The Co-operative Group
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The Co-operative Group, the trading name of Co-operative Group (CWS) Ltd, is a United Kingdom consumers' co-operative, one of the largest consumer-owned businesses in the world. 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.
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[edit] 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. [1]
The merger should be completed by July 2007 and will be headed by United Co-operatives' current Chief Executive, Peter Marks. The Society is also in the process of deciding whether to transfer the engagements of the small Scottish Nith Valley Co-operative Society which, while trading profitably, is suffering a burden with its pension fund commitments.
[edit] 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. In food retail, it has 5% of the UK market, in approximately sixth place, down from 30% in the 1950s, when much of the rest of the market was taken by individual independent shops.
[edit] Food Retail
The Society operates over 1,700 food stores across the UK. Its stores are categorised into three sizes: Welcome convenience stores; Market Town small supermarkets; Superstores full-scale supermarkets. Previous names of the supermarkets that did not obtain the name 'Co-Op' were 'Co-Operative', Co-Operative Pioneer' and 'Leo's' however these were all dependant on the location of stores around the UK.
[edit] Finance
The financial subsidiary, Co-operative Financial Services (or CFS), is made up of the Co-operative Bank with the smile internet bank and the Co-operative Insurance Society (or CIS).
[edit] Travel
The Society operates the UK's largest independent travel agency, Travelcare, with 380 branches as well as direct-sales through telephone and the internet.
[edit] Funerals
Co-operative Funeral Services is the UK's largest funeral director with over 500 branches.
[edit] Pharmacies
Co-operative Group Pharmacy Limited formerly known as National Co-operative Chemists Limited is one of the largest operators in Europe with over 300 branches in the UK. The chain is currently being converted to the 'the co-operative pharmacy' brand.
[edit] Footwear
Shoefayre, formerly a separate shoe retailing company co-owned by several societies, is now wholly owned and managed by the Group, with 283 high street footwear stores.
[edit] Farming
The Society manages over 85,000 acres of land across the UK under the Farmcare banner.
[edit] Property
The Society maintains a successful property business that manages investment and trading properties.
[edit] Legal
The Society announced the formation of a new division, Co-operative Legal Services, in April 2006, to be based in Bristol. [2]
[edit] Former businesses
[edit] Cars and property
The Society sold Priory Motor Group, a car dealership business, in 2005. Reg Vardy bought the majority of the dealerships.
[edit] Engineering
Syncro was the rebranded engineering and building services business of the Co-operative Group, based in Salford. Syncro was sold in 2006.
[edit] 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.
[edit] 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 retailing electrical goods and designer beds.
[edit] Dividend
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.
[edit] Co-operative practices
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.
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 many co-op own brand pharmaceutical 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. [3] [4] Some of the co-op products carrying this symbol include: hair shampoo, baby lotion, toothpaste, mouthwash, fabric conditioner and washing-up liquid.
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.
[edit] Co-operative principles
1. Voluntary and open membership
2. Democratic member control
3. Member economic participation
4. Autonomy and independence
5. Education, training and information
6. Co-operation among co-operatives
7. Concern for community
[edit] 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.
[edit] Awards
The Co-op was awarded the 2002 Shell Worldaware Business Award for sustainable development. [5]
[edit] See also
[edit] External links
[edit] References
- ^ Boards of the Co-operative Group and United Co-operatives (2007-02-16). Co-op boards back merger plan. Press release. Retrieved on 2007-02-17.
- ^ 'Co-operative Legal Services venture launched'. Money News (2006-04-21). Retrieved on February 18, 2007.
- ^ the Co-operative Group (2005-10-27). Did you know the Co-op is the only supermarket with BUAV accredited own-label ranges?. Press release. Retrieved on 2007-02-18.
- ^ Error on call to Template:cite web: Parameters url and title must be specified. Decision News Media SAS (2004-07-05). Retrieved on February 18, 2007.
- ^ 2002 Shell Worldaware Business Award. Worldaware. Retrieved on February 18, 2007.
Major chains: ASDA • Marks & Spencer • Morrisons • Sainsbury's • Somerfield • Tesco • Waitrose
Convenience stores: Budgens • Co-op • Costcutter • Londis • SPAR
