The sensible response to this latest crisis might at first seem to be a retreat to calmer water. The group has had a lot of press in the past year and not a lot of it has been good.
Expectations are that it will post a loss of up to £2bn this year. The group’s reputation is in tatters and perceptions of the brand across a range of measures are declining, whether at its supermarket or banking business, according to YouGov’s Brand Index.
To make matters worse, Sutherland has taken pot shots in his departure, describing the task of turning around the Co-op as “huge” and quite possibly “impossible”.
Certainly the Co-op has governance issues that will take time to sort out. John Thanassoulis, professor of financial economics at Warwick Business School, describes the row between Sutherland and the board as a “clash of cultures” that raises questions over the group’s ability to decide on a strategy for the “greater good”.
Yet that is not the most pressing requirement. Most important is to rebuild its reputation and sense of purpose.
The way to do that is through marketing. It might be tempting with losses mounting to cut external communications, waiting for a solid turnaround strategy and the outcome of its “Have your say” appeal before embarking on any big marketing campaigns.
That would be the worst thing it could do. The situation at the Co-op has come about because it lost sight of what it stood for. Not just its membership scheme but what that means to people and the role it plays in the community, whether through its funeral care services, convenience stores in small towns or more local approach to banking.
As Phil Dorrell, director at Retail Remedy, puts it, the general public no longer understands the relevance or uniqueness of the Co-op brand. That is what needs explaining.
“Without clear messages, a sense of purpose and strong leadership the patience of those loyal to it will wear thin. There needs to be a reason why the younger generation buy in to the Co-op brand and this missing piece of the puzzle is key to the long-term success of the Co-op,” he adds.
When Gill Barr was first appointed marketing director three years ago she spoke about the need to launch a unified marketing strategy that explained Co-op’s brand purpose.
Fast-forward 18 months and the introduction of the “Here for you for life” strapline hailed promise that the group might finally be about to demonstrate why it was different and how it could be there for customers in a way other businesses couldn’t.
Fast-forward again to the present and none of this has happened. There is no celebration of what makes the Co-op unique, no overarching strategy that ties its separate businesses together, no brand statement.
There are bright points for the Co-op. Its supermarket business outperformed the market over Christmas and it has some new store concepts that should boost that still further. Its online survey hints at a company willing to not only ask customers what they want, but also to listen. It will hopefully tackle some of its issues when it announces the outcome of its strategic review at the end of this month.
However, it needs to give people a reason to use its services. To do that it needs to remind itself what it stands for and then work out how to market that.