Co-op claims its brand is ‘resilient’ despite series of crises

The Co-operative Group claims its brand reputation has held up despite interim chief executive Richard Pennycook labelling last year as the worst in the company’s 150 year history following a “disastrous” 2013 that saw a near failure of its banking business and the group plummet to a £2.5bn loss.    

Coop Bank
Despite problems in particular at the Co-op Bank, the firm claims the brand is resilient.

Speaking on a press call this morning (17 April), Pennycook says the results were “not just an accident last year” but followed a number of years of “missteps” by management that had led to a weakening of the Co-op and “badly damaged” its heritage.

However, in response to a question from Marketing Week, Nick Folland, executive director of external affairs, said while there is “no question” that the Co-op brand has been affected by the company’s recent crisis it has also shown “resilience”. He claimed the results of the Have Your Say poll point to a great affection for and loyalty towards the Co-op throughout the country, describing the number that responded as “staggering”.

More than 180,000 people responded to the survey, which asked the public to offer their views on its future. Folland said that justified the continued existence of the Co-op brand but that it needs to revitalise its purpose to prove to the public it still has a place.

“There is no question that has been an impact, we measure buzz scores, and that has been ongoing over a long period of time. But we are encouraged that we also see resilience. We are positive about the future once we can stabilise the business,” he added.

However, figures from YouGov’s brand index show that over the past year the buzz score for Co-op’s supermarkets, a measure of the positive and negative things said about a brand, dropped by 16.2 points to -7.2, a statistically significant decline and putting it second to bottom in a list of 25 supermarkets. At the bank, the buzz score has slumped to -24.7, from 6.4 a year ago.

The Co-op had previously said it would unveil its new strategy at its AGM on 17 May, however that now looks unlikely to be the case as the company is still waiting for the review into what went wrong at the bank from Sir Christopher Kelly and recommendations from Paul Myners on governance reforms.

Instead, the Co-op’s members will vote on the four principles that will set out what the firm wants to achieve. These include a board of directors that are qualified to lead, how members hold that board to account and how the wider membership can be more involved and engaged.

Pennycook said he believes there is still a “compelling” need for a business that operates differently in terms of ownership and operation. However, most analysts believe that requires a new governance model closer to that of a more traditional listed company, which regional boards have opposed because it means they will lose power.

Pennycook admits that without the changes the Co-op will “continue on in a way that reflects underperformance and gradual declines”.

“[Our objective] is to thrive and be a powerful force in the UK. There is an opportunity for that through the reform agenda. We need to make the case and then it’s for the members to decide if they want to take that journey with us,” he added.