Mutualism does not bring instant success

Co-operative Group Chief Executive Peter Marks spoke at the Mutuals Forum about the society’s success as a mutual business.

Not long after the Group’s announcement of its strong results, Mr Marks told delegates at the Forum it was easy to become complacent and warned “mutualism in itself is not a panacea for business success”. 

He said that when he joined the Movement more than 40 years ago, the co-operative sector accounted for 25 per cent of food retailing and “it was the Tesco of the day”, but in the years and decades since, that share had dwindled to less than five per cent.

“We allowed the competition to take our market share and we were seen as confused, incoherent and inefficient,” he said. “Our shops were tired, our shelves were sometimes empty and our staff were sometimes disinterested.”

Mr Marks said the Co-operative Group’s ethical difference was not in itself any guarantee of commercial success: “It is no good being the nice, ethical, trustworthy people if the business doesn’t give people what they want. We would be the most ethical organisation in the corporate graveyard.”

He argued that, in many ways, the Co-operative Movement had held itself back over the years with societies concentrating their efforts on fighting one another rather than the real competition.

Having talked about the decline, he turned to the fightback, which is one of the biggest refurbishment programmes undertaken by any retailer where 700 stores are being transformed a year; 14 quarters of like for like growth; interim results for 2009 showing sales up by 27 per cent and profits by 17 per cent and record investment of £2.5 billion over three years.

He highlighted the Group’s successes away from food: the third largest pharmacy in the UK, the leading independent travel business in the country, Europe’s leading funeral provider, the UK’s largest farmer and the UK’s leading ethical bank.

Those successes needed to be built on: the power of bringing the businesses together under the new branding and of people shopping right across the whole family of businesses is “phenomenal” he said.

Mr Marks described today’s Co-operative Group as an “efficient, coherent organisation with the confidence to invest”. He told delegates: “In the past we would have been selling disappointment, as our offer in terms of shops, products and service did not match our ethics. They do now.”

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