Co-op chief’s inspiration behind single society quest

Co-operative Group Chief Executive Peter Marks has revealed the two crucial moments that persuaded him to launch a personal campaign to save co-operative retailing in the UK by...

The most significant transformational moment came just over five years ago when, a few days before he was due to speak at the annual National Retail Consumer Conference in Stratford-upon-Avon, he heard an interview with Tesco Chief Executive, Terry Leahy, on his car radio while travelling to work.

Mr Leahy was asked if the Co-op’s convenience store presence would offer Tesco competition in the sector. He replied: “There’s only one winner in convenience store retailing and it’s not the Co-op!”

The remark enraged Peter Marks and made him determined to reverse the Movement’s downward spiral and end the era when, he says, retail co-ops were regarded as fragmented, confused, inefficient and uncompetitive.

Five years on, Mr Marks told this year’s NRCC event: “I nearly crashed the car after hearing Terry Leahy’s comments. I couldn’t wait to get into the office and told my corporate affairs director, Mark Craig, that I was going to throw away the speech we had prepared for Stratford and start again — and that’s what we did.”

Mr Marks told senior colleagues at United Co-operatives that he was going to deliver some home truths to the Movement — and confront the reality of 21st century retailing — by calling for the establishment of a single society.

The speech, delivered in a personal capacity and reported in the March 21st, 2006, edition of the News sparked a huge response, not all of it positive. But although the single society has not materialised, there has been a massive amount of consolidation and the 40 societies that exisited five years ago have been reduced to 19 — an outcome that delights Mr Marks as the Group is now responsible for 85 per cent of the country’s co-operative trading.

Mr Marks told NRCC delegates that he would still love to see other societies come under the Group’s banner. But he insisted: “It doesn’t matter any more. The consolidation was the important thing and it meant we were able to get the economies of scale I was striving for.

“I still believe passionately that a single society is the right way, I’m not going to change my view. However I respect those societies that want to remain independent and please don’t think Peter Marks wants to park his tanks on everybody’s lawn, because I don’t!”

Mr Marks admitted he did not think his speech five years ago would have any effect. He said: “I honestly didn’t think anything would change. I know change is slow in the Co-op Movement, but I had got it off my chest. It was like saying the unsayable — calling for a single society was like committing a mortal sin! 

“But I don’t claim credit for the consolidation that’s occurred — the people I give credit to are the boards of directors who took courageous decisions and the members who voted, on average, at more than 90 per cent in favour of the consolidations.”

And Mr Marks revealed that his first big ‘single society moment’ came in 2005 when as Chief Executive of United Co-operatives, he tried to persuade his CWS counterpart Martin Beaumont to back a joint bid to acquire the Somerfield chain of food stores.

He explained that he suggested to Mr Beaumont that the societies should act together as the Somerfield opportunity represented the last chance for the Movement to improve its food market share.

Said Mr Marks: “Martin agreed that I was right, but maintained CWS wasn’t in a fit enough shape to mount even a joint bid and said his society could not be involved. I left his office feeling quite depressed, but went back to my own society (United) and persuaded my board to look into making a bid on our own.

“We made a serious attempt to acquire Somerfield, but we eventually walked away because the risks were too great for us as a business — we were too small. I thought: ‘If ever I needed any more evidence about the need to consolidate, this is it.’ Fortunately, Somerfield came back on the market again (after the United/Group merger in 2007) and we bought it.

“Somerfield has been and will be an enormous success and people will see that when the Group’s annual results are published in a few weeks’ time.”

Delegate Pauline Green, former Co-operatives UK Chief Executive and now ICA President, praised Mr Marks’ contribution over the past few years and said the entire co-operative world had been inspired by how the reconstituted Group had drawn the UK Movement together and driven its success.

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