Co-op Group is set to weather economic storm

Co-operative Group Chief Executive Peter Marks has expressed his pride that the 2007 target to double sales and profits over three years has been achieved.

But after saluting what he says has been “a tremendous year for the Group” at the society’s recent Annual General Meeting in Manchester, Mr Marks warned that the current economic downturn — the worst he has known in more than 40 years in the Movement — will ensure 2011 is “a very tough year”.

Mr Marks told the AGM: “The economy is in a shocking state! I’ve been around long enough to have operated and worked through three or four recessions.  This is by far the worst so far as it affects the consumer. It is absolute war out there. 

“We’ve got huge challenges — not only the economy, but all the change that’s going on in the Group because of what we’ve achieved over the last three or four years. But we’re in great shape and in much better shape than most businesses to withstand the economic storms.”

To illustrate his point, the Chief Executive said that, recently, a Group Corporate Bond refinancing programme was launched which was over-subscribed within hours — evidence of how the financial market views the strength of the business, said Mr Marks. 

“But we have to hold our nerve,” he said. “It’s a worrying time for consumers; a worrying time for the Government and a worrying time for businesses, but the Group is in fantastic shape to withstand the economic storm.  

“We’ve always been a business that’s looked long term. Many PLCs worry about their share price and they start making short term decisions which impact adversely on the long term. We don’t have to do that.  We are focused on our long term plans.”

Mr Marks said the Group had gone through more change than it’s ever done, but insisted changes made in the past four or five years had been essential to build a dynamic, forward looking, modern, efficient business.  

He added: “It has been a tremendous year for the Group with strong financial performances right across our whole range of diverse businesses, record sales and profits achieved. I feel really proud to announce our plan agreed with the Board in 2007 to double sales and profits over three years has been achieved.”

Reporting a record dividend payout to members of £150 million, Mr Marks commented: “The business hasn’t achieved that record ever, so it’s fantastic. Of course, we’re a social enterprise as well as a commercial enterprise and we’ve been able, because of our profits, to invest £12.5m in our local communities plus £5m has been pledged for MENCAP and Enable.

“Our social objectives have never been as powerful or as strong and unless we have a strong commercial organisation, we can’t hope to achieve what we want to do socially.

“There aren’t many businesses that can show that degree of growth and improvement both in the top line sales but, most importantly, in the bottom line profit. 

“I’m fond of my footballing analogies and I say to people that I’ve played pretty much in the lower reaches of the League for most of my career, but I’m happy to say I’m now playing in the Premiership.

“We have made fantastic progress, but Premiership isn’t the end of it. It’s not satisfactory just to be in the Premiership; we want to be in the Champions League and that’s where we’re heading!”

In this article

Join the Conversation