With the Heart of England society closing down its department stores, the future of co-operative department stores seems unsure. Retail consultant Graham Soult believes that in order for their non-food outlets to succeed, co-operatives should engage more with their members and remind them of what they are offering.
“It doesn’t mean having to trade online, but even employing social media, looking at how to communicate with members can help,” he said. Other big department store chains are using multichannel retailing to sell their products, he added, but for independent co-ops with two-three non-food stores, this is difficult to do.
“My approach working with independent retailers is not necessarily to launch online but to really look at making the store work.” Back in 2013 Mr Soult visited some Heart of England department stores. Chief executive Ali Kurji took him on a tour of the department store in Hinckley.
“I was really impressed,” said Mr Soult. “The store in Hinckley was the best non-food co-op store I’d seen – it had had a £1.5m modernisation in 2010 and it was still looking very good in 2013. What I was told at the time was that that particular store was making money. It is an example of where they had invested money and it seemed to be paying off. I was particularly sad to hear they had closed it.”
The Nuneaton store was another good example, he added, but the store in Atherstone was not as modern, showing that department stores in smaller towns did not benefit from the same level of investment.
“It is scary how many department stores have gone over the last few years, some of them because they haven’t had the investment – most of them looked quite tired,” said Mr Soult, adding that co-ops on the whole “have been quite slow to adapt to the changing retail environment”. He grew up in Tamworth, which still has an independent society with a department store.
“I am always surprised how many members the co-op has – and how few engage at AGMs. There’s a great opportunity there for co-operative’s to engage more with their members and remind them of what they are offering,” he said.
Another reason why co-op department stores have continued to close down is mergers. This tends to happen when bigger co-operative societies with no department stores take over smaller independent ones that have few department stores, Mr Soult explained.
“Penrith had a department store that was profitable, but it has now gone because of the merger with Scotmid. Something is lost as co-ops get bigger and bigger and more removed from their roots, so Heart of England will focus on food and in doing so it won’t be any different from any other co-op.”
He argues that the co-operative brand can also be a problem. “Chelmsford Star department store is perhaps among the most successful – the society is trying to succeed by not playing the co-op card too much, giving the store a distinct identity that isn’t just a ‘co-op’ department store.
The co-op brand and name comes with both positive and negative baggage, said Mr Soult. “I would like to think that the co-op name comes with good baggage about community and being rooted in the place – but among consumers, you’d think about a dusty department store rather than a modern experience.”