Following the collapse of British Home Stores, Co-operative Group CEO, Richard Pennycook, highlighted how the co-operative model offers a different way for doing business.
An editorial in The Times newspaper on 25 July, which reflected on the BHS debacle, concluded that ‘No more productive system has ever been devised than market exchange and capitalism’.
“As you know, the Co-op is a different and very successful way of doing business and has been for 170 years, so I wrote … to the Times and its readers,” said Mr Pennycook on the Co-op Blogs.
In his letter, Mr Pennycook said there is an alternative. “It’s called the Co-op and it is a different way of doing business,” he wrote. “As a sector co-ops contribute £34bn to the UK economy through more than 7,000 businesses owned by more than 17 million members who live and work in the communities we serve.
“Being owned by the people they trade with means co-ops aren’t driven by short-term returns to shareholders or subject to the whims of private owners. Our owners have a direct say in how our businesses are run and how our profits are invested.”
He admitted it was not always easy, but added that the co-operative model is uniquely equipped when faced with crises.
He continued: “Co-ops have had their challenges. The Co-op I lead faced a near death experience a couple of years ago which other business models arguably wouldn’t have survived. But being owned by members meant long-term decisions taken in the interests of the many not the few. Decisions which saw the Co-op and the 70,000 jobs we support survive and now begin to thrive.”
BHS is being wound down after administrators failed to secure a rescue deal. According to MPs, the company was subject to “systematic plunder” by former owners Sir Philip Green, Dominic Chappell and their respective “hangers-on”, putting at risk 11,000 jobs and 20,000 people’s pensions.
Added Mr Pennycook: “We all feel most for the people caught up in the collapse of BHS but if the fallout shines a light on a different way of doing business that benefits us all, some good will have come of it.”