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Co-op results - Introduction
Engagement with RTTT
The Co-operative Group (Co-op) was one of the first companies to sign up to the Race to the Top project in 2001. It has worked constructively with other project partners to develop and test the data collection methods used by the project. It has collected and submitted data for the project in 2003, and took part in the supplier survey.
Company overview
The Co-operative Group operates over 1,800 food stores and has 43,000 employees. The current structure formed in 2000 when the Co-operative Wholesale Society (CWS) and Co-operative Retail Society (CRS) merged to create the world's largest consumer co-operative. Apart from food retailing, the Group also has businesses in banking, insurance, funeral directing, car dealerships, travel retail, pharmacy and farming.
Though market share is only around 4.2%, the Co-op is market leader in top-up food shopping, through its Welcome convenience store format, the 600 store Alldays convenience chain acquired in 2002, and the Balfour chain of convenience stores and newsagents acquired in June 2003.
In terms of ability to do well in ethical business, the Co-op has structural strengths and weaknesses. Unlike plc's, the Co-op's business mandate is 'based on a set of values and principles, which include values of social responsibility, openness democracy, equality and caring for others'. "Commitment to Responsible Retailing" says the Co-op, "is about turning these values into a practical reality within the market place.” Issues of fair and ethical trade are therefore pillars of the business. Other principles of the Co-operative movement include education, training and information, concern for the community and cooperation between Co-operatives. Consequently, the Co-op sees itself as campaigning organisation as well as a retailer; examples include the 'honest labelling' and 'food crimes' campaigns.
But small store size and the 'top-up' shopping market segment present major challenges, such as restricted shelf space for ethical lines of produce, and a customer demographic profile traditionally resistant to paying premium prices for Fairtrade organic or high-welfare niche produce.
The Group has experienced a recent upturn in profitability as it focuses on the convenience and top-up retail sectors. In 2002 the Group won the prestigious 'Multiple Retailer of the Year' prize.
2003 results: overview
The Co-op was far and away the leading company in Race to the Top 2003. The Group achieved 'Best in Category' in 6 out of 7 categories of Race to the Top themes--Producers, Workers, Local Economies, Nature, Animals, and Health. Putting policy into action is not always smooth — the supplier survey, for example, indicated that the Co-op has work to do in terms of supplier relationships. And the store survey associated with the 'Local Economies' module showed that local sourcing of food is a weakness. But in general, these outstanding results show what can be achieved when a company puts its whole operation behind the idea of responsible retailing, despite a challenging position in the food retail market.
It would have been very interesting to compare the Co-op's results with those companies with high-end customer bases — especially Waitrose and M&S — to see just how far the Group has come, and how the assumed ethical leaders now have to watch out for the Co-op moving the goalposts of responsible retailing. And there are many lessons from Co-op's performance, which has accompanied its re-invigoration in the fortunes of co-operative retailing, for the companies, which say that ethics are a luxury they cannot afford.
Comments from Co-op
"Aspects of broad social responsibility play a strong role within the Co-operative Group's corporate strategy, supporting our consumer membership and the values and principles upon which the Co-operative Movement was founded. Placed alongside our respected product range and our extensive store portfolio providing convenient shopping in many communities, our approach as a Responsible Retailer is entirely consistent with our strategy, and our position as a modern, competitive retailer with the interests of consumers at its heart.
"The different aspects of Race To The Top have formed elements of our approach for some years, developing animal welfare standards, creating opportunities for improved diet through product composition and clear labelling, or through being the leading supermarket for Fairtrade, the Co-op Brand product range of food, grocery and non-food products has and continues to play a vital role in delivering the standards of social responsibility that set targets for others."
Posted:
08-Dec-2003