Retail co-operatives must become more competitive on price and rationalise unprofitable stores. This was a recommendation made almost 60 years ago by the Co-operative Independent Commission in 1958.
Co-ops were faced with the threat of being too small and outnumbered by the multiples, such as Asda, Tesco and Sainsbury’s. The two biggest recommendations from the commission were to rationalise unprofitable stores and to be more competitive on price. Fast-forward to 2014 and we saw the Co-operative Group start to identify and tackle those same issues.
The retailer was simply too big and not as profitable as it should have been, especially after it helped to prop up the Co-operative Bank. So under its True North initiative the Group started to separate unprofitable stores from its estate by categorising stores as core or non- core. It also started to drive down prices on its own-brand range to become more competitive.
Full coverage from the Co-op Group AGM as the changes in branding and membership are unveiled
Following the 1958 Commission, changes over the next decade culminated in the adoption of a single brand, the Co-op Cloverleaf, in 1968. That’s the exact same logo unveiled this year by the Co-operative Group.
And in another sense of irony, the revitalisation of co-ops back then was brought about by Philip Thomas, who was the first outsider to be appointed chief executive of the Co-operative Wholesale Society (which is now the Co-operative Group). Historians cite this “outsider” perspective as a key change to the Co-op’s fortunes in the 60s/70s. Today, Richard Pennycook is the third chief executive to be appointed from outside the traditional co-op retail sector (the second was his predecessor Euan Sutherland). Will we see a change in the Co-op’s fortunes again?
For the cloverleaf to work again, will they also need full adoption by the societies using The Co-operative?
When ‘The Co-operative’ brand came along in 2008, it replaced a skinnier version of the Cloverleaf that was refreshed in the 90s, which at the time had associations of run-down stores. ‘The Co-operative’ was a project to modernise Co-op shopping. It also helped bring together around 30 different fascias.
From a brand reputation point of view, it makes sense for the Group to go back to its roots with the Co-op. The flat and square design is on point today, especially through social media. Plus it distances itself from the Co-operative Bank and Travel – two brands that it has stakes in, but little control.
But for the cloverleaf to work again, will they also need full adoption by the societies using The Co-operative? The largest co-ops who will need to make a decision on the change are Midcounties, Central England and Southern.
Over the next few years, the Group will be re-badging stores as part of its general refurbishment plans. But it will want to escalate this programme to ensure The Co-op is everywhere – it plans to have the new design in use across the organisation by May 2019.
If other societies follow suit, there will be an additional cost and it will have to fast-track any planned refurbishments. Those co-ops will also want to monitor the business performance of the refreshed Co-op brand. The return on investment will need to be worth it in a challenging retail marketplace.
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