Co-op: What makes us different isn’t cutting through

Having swung back to profit in 2017, the Co-operative Group now wants to better communicate its work championing causes that makes a co-operative different to other businesses.

Co-op supermarket

The Co-operative Group wants to do a better job of explaining what makes it different from other businesses in the UK as it looks to build on a strong performance in 2017 and “close the gap in the Co-op circle”.

The company returned to profit in 2017, posting profit before tax of £72m, compared to a loss of £132m in 2016 and finally putting the debacle with its banking arm behind it. Revenues were stable at £9.5bn, with all aspects of the business performing well: food like-for-like sales were up 3.4%, funeral and life planning revenues grew by 4% and insurance like-for-like net earned premium growth increasing by 8%.

The reinvigorated membership scheme has also been a success, signing up more than 1.2 million new members, up 15% year on year to 4.6 million in total. It generated £74m in member rewards in total, with £61m going to personal rewards for members and £13m to more than 8,000 community projects.

Steve Murrells, the Co-op Group’s CEO, says the results show “how much progress we have made” and are a reflection that the “Co-op difference” in terms of its business model, approach to business, and the fact it returns profits to members and communities, “really resonates”. However, he admits there is more to do to ensure the Co-op is commercially successful and delivers community changes that really matter.

“Through our Co-op Membership rewards, the thousands of community causes we’ve been supporting, through our campaigning, our commitment to academy schools and apprenticeships, and the great products and services we sell, we’ve been creating that rich and diverse Co-op value,” explains Murrells.

“But the idea of shared value still isn’t understood. The Co-op difference isn’t quite cutting through. We need to do more to close the ‘gap’ in the Co-op circle.”

The Co-op plans to do this by shouting louder about what makes it different, ensuring it has a “distinctive voice in society” and champions causes that matter while taking a stance as an employer. Murrells highlights the group’s campaigning on issues such as modern slavery and loneliness, as well as its move to be the first retailer to sign up to a bottle deposit and return scheme to reduce plastic waste.

It also wants to develop its membership scheme further by making more of its data and building technology that can help reach users. Matt Atkinson, former Saga and Tesco CMO, was brought on board in January to fuel this work.

The Co-op further plans to change how it operates, working on bringing together its different businesses under ‘One Co-op’ and offering more consistency in its offerings, customer experience and how it talks to customers.

“We’ve been holding ourselves back through the way we organise ourselves internally and how we work together. From now on we’ll be ‘One Co-op’ in how we think, how we act and how we talk to our customers and members,” says Murrells.

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Comments
  • Chris Arnold 10 Apr 2018 at 11:07 am

    They say |it’s not what you say but what you do” but alas unless you say, consumers rarely notice what you do. The Co-op, is, without doubt, one of the most ethical retailers in the UK, but having conducted several surveys into community engagement and ethics (with CONNECT2), consumers are not getting the message from not just the Co-op, but others like M&S. In fact, consumers seem unaware of just how much good work or support the big retailers give. The issue is that traditional marketing departments don’t understand how to engage community. It’s specialist skill (known as B2C2) and the UK is behind the States in this area. (It’s certainly not via social media, if that’s what you are thinking.) It requires a different skill set, more ‘pull’ than ‘push’. It requires understanding how communities interact, how word spreads through communities, more by word of mouth than anything. About key influencers. And how you can use traditional marketing channels (and social) to reinforce the message. It’s a science all of it’s own.

  • Pete Austin 11 Apr 2018 at 8:35 am

    My grandfather was a co-op manager and back then it was a great thing. Everyone relied on the divvy. But in the last 50 years, not so much. It seems like just another chain with an over-complicated and annoying loyalty scheme and some virtue signalling.

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