This year’s Co-operative Retail Conference – held online 12 months into the UK’s Covid-19 crisis – saw the movement assess its place in a world undergoing extraordinary changes. The Covid-19 pandemic; accelerating technological change with AI, digitisation and robotics; Brexit; economic uncertainty and climate change all mean retailers and consumers are operating in a radically altered landscape.
Delegates at the event, organised by Co-operatives UK, heard retail perspectives from outside the co-op movement, with. Nick Gladding from retail analysts IGD warning that the economic impact of Covid-19 and Brexit “will be permanent”, with a grim outlook despite growth predictions of 4-7%.
The pandemic year has brought mixed fortunes for retail co-ops, with a surge in sales as lockdown saw most food consumed at home, and improved consumer trust in the grocery sector, but also a challenge to the convenience model favoured by co-ops as shoppers moved towards bigger basket sizes and infrequent shopping.
Meanwhile innovation in the industry continues, with Sainsbury’s developing its Neighbourhood Hub stores, Morrison’s developing its store kitchen format and Amazon Fresh opening a fully automated London store.
“Co-op stores are stepping up well” to this competition, he said, giving the example of Scotmid’s Kitchen format, offering flexible food-to-go menus. The product range offers daily specials to keep the range interesting for customers and changes with the seasonality of the products.
There is scope for co-ops to develop their ethical shopping offer. Mr Gladding predicted that the COP26 climate summit – to be held in Glasgow this November – “will have a big impact on shopper behaviour”, leaving consumers more mindful of the environmental impact of their purchases.
But there are also economic challenges on their way, with shoppers expected to have less money in their pockets – posing the question of whether or not co-ops can compete on price. The price question saw the Co-op Group come last in recent survey of UK supermarkets by Which?.
Mr Gladding says co-op retailers face “a balancing act” and need to “find sustainable options that are cheaper to deliver”. For instance, money could be saved by cutting down on packaging – which would also have appeal to eco-conscious consumers.
Jo Causon, from the UK Customer Satisfaction Index (UKCSI), said the pandemic had seen great agility and innovation from retailers.
“No one has stood still,” she told delegates, adding that businesses will have to keep moving – offering a more immersive tech experience, and offering more local and community-based services. These changes will also mean “tough business decisions” making good governance crucially important.
Covid-19 has accelerated changes in the industry rather than introducing anything new, she thinks. Automation means shoppers will want faster transaction times but they still want an element of human interaction – which has been especially prized during lockdown. Shoppers will want guidance and advice, for instance on what to buy and how to prepare items.
The pandemic has also affected people’s mental health and wellbeing. Emma Slaven, from government arbitration service ACAS, said one in six workers has mental health problems at any one time but many are still afraid to discuss it with their employer. She said businesses should treat it with a holistic approach and recognise that everyone in an organisation has a role to play. Useful initiatives include appointing someone to look after the mental health of staff and to assess the impact that changes such as increased overtime could have.
The pandemic has also accelerated trends towards digitisation with the mass switch to remote working, Rose Marley, chief executive of Co-operatives UK, said new tech – AI, 3D printing, robotics, 5G – present challenges but also offer “opportunities for co-operation”, with “everything in the world connected”.
Don Sodergren, from homeworking software business Yourflock, said the right tech would help remote teams perform more effectively. Warning that 85% of the jobs people will have in 2030 don’t exist yet, he said it was vital for co-ops to keep up with new trends.
“Who is going to be empowered is the important question. Us or the big guys? With the right people and the right technology you’ll take over the world. Without them the world takes over you.”
Collaboration is important to keep the co-op sector resilient through these changes, he said – but tech can drive this collaboration; co-ops also have the advantage that the new generation is values-driven and are using digital as a platform for crowdfunding and hackathons.
Mr Murrells said: “We’re excited by tech possibilities and we’ve been investing in them so we can connect with our customers … It’s important for our members that we use tech for good.”
He added: “We need to run towards tech. Co-operation really does work but some of the issues we’re facing into are so complex and so deep-rooted we’re not going to solve them on our own.
“Partnering and patterning in tech is something we’ve got to grab, and we have to choose our partners wisely. Collaboration is going to be the way we break through in tech.” He gave the example of Starship, which supplies the delivery robots the Group is trialling in Milton Keynes.
Ms Robinson said Central England is working with Birmingham City University on sustainability issues and said co-ops should pool their resources and knowledge to push for a “fully digital co-operative movement, with more platform co-ops and ethical versions of services like eBay.
“It’s ridiculous that we’ve got people all over the place working separately on the same problems,” she added.
Taking the theme of the conference back to its opening discussions of innovative store formats, she also discussed Central England’s new stores, including its flagship site at Boley Park, which includes artwork, a cafe and zero-waste refill stations.
“We’re giving members what they want in most sustainable way,” said Ms Robinson – adding that the society aims to be carbon neutral by 2030. Central England asks four questions of new initiatives: is it financially sustainable, is it humanly sustainable, is it environmentally sustainable, is it inclusive?
A similar mindset, of collaboration and consultation and concern for wellbeing, informs the society’s other goals, she added – such as its campaign for stronger laws against abuse of retail workers, its work on inclusion, and its efforts to tackle food poverty.
Similar initiatives are being carried out at Midcounties Co-op, whose chief operating officer for utilities, Lizzie Hieron, said partnerships were being being used to provide sustainable, people-centred services. The Phone Co-op is working with TalkTalk to provide environmentally friendly broadband services, she said, while the takeover of Co-op Energy by Octopus has seen the two organisations work with Westmill Wind and Solar co-ops to develop a community energy tariff. Power purchase agreements have been signed with local community energy generators in 90 sites. She said it is set to launch in April and “is about as green as a tariff can get.”