Is this year’s Co-operatives Fortnight an opportunity to put the past year of damage to the co-operative brand behind us?
A few years ago, the reputational damage that the co-operative movement has suffered over the last 12 months was unimaginable. As recently as mid-2013, co-operatives had a successful International Year of Co-operatives behind them and the Co-operative Group appeared to be on its way to becoming a major player in the banking industry.
The public’s view of co-operatives was accordingly positive, with Co-operatives UK’s 2010 poll showing that 66% of the British people trusted co-operatives, with 81% seeing them as local and 53% as democratic.
Politically, co-operatives and mutuals were being trumpeted. The ‘John Lewis economy’ was hailed by the Nick Clegg as a model for business, while cabinet secretary Francis Maude proclaimed the benefits of co-operatives for public services. “Spinning out into a mutual,” he said, “can deliver benefits for the workforce, for customers and for the taxpayer.”
But in late 2013 revelations erupted around Bank chair Paul Flowers’ private life, the collapse of the Lloyds Verde bid and the Co-operative Group’s large-scale financial and governance problems. Well-documented and high-profile political investigations, media reports and resignations followed.
What has the fallout been? Has the image of the co-operative movement as a whole been damaged by the scandal and business problems?
Recent polling carried out by Co-operatives UK shows that the last year has had a negative impact.
Following the Paul Flowers and Bank revelations, the number of people trusting co-operatives at the end of 2013 dropped by 19%, to 47%. By April of this year it had dropped further, to 40%. While trust remains far higher in co-operatives than in business at large (just 7%), it has been significantly knocked. The number of people associating co-operatives with being local and democratic has dropped dramatically, to 42% and 36% respectively.
The brand damage that these figures indicate is borne out by the experiences of co-operatives. Ian Rothwell, development manager at Co-operative and Community Finance, which provides loans to co-operatives, says that the number of loan applications has dramatically fallen this year.
“It’s been quiet over the last six to eight months, to the point that it was starting to get worrying. Quite a lot of people get us confused with the Co-operative Bank. When you’re dealing with communities buying a pub they just know ‘The Co-operative’.”
Mark Smith, chief executive of the Southern Co-operative, one of the UK’s largest consumer co-operatives, says the problems at the Group have had an impact. “The brand damage has been quite significant,” he said. “It’s been something we’ve been able to manage because people understand our business and know we operate independently, but some customers have made comments and asked questions so it is important we make them understand.”
Even Robin McMillan, chief executive of the Wine Society – a successful business which does not market itself strongly as a co-operative – views “the short-term reputational fall out of the Co-op Group’s recent banking crisis” as the biggest challenge for his business this year.
And some businesses have been quick to distinguish themselves from The Co-operative brand. When Nationwide, for example, announced its results in November last year, executive director Chris Rhodes said: “It’s quite sad what happened at the Co-op … but Nationwide is a very different business. We want to draw a distinction between what happened there and us.”
The high-profile problems at the Group have, ironically, resulted in some positives for the image of co-operatives. Co-operatives UK’s research estimates that awareness of co-operatives has grown considerably. In just six months, there has been an 8% rise in the number of people who know what a co-operative is, up from 75% in December 2013 to 83% the following April.
The increase in awareness largely stems from the high level of media coverage of the co-operative sector. While much has been negative, Co-operatives UK points out that there has been a focus on the diversity of co-ops, which may be making people more aware of the movement’s breadth.
The Guardian, for example, has featured regular comments from senior movement figures such as Midcounties’ Patrick Gray and the Phone Co-op’s Vivian Woodell, the Telegraph ran an article from the UK chief executive of dairy co-op Arla, and Radio 4 broadcasted one of its lunchtime shows from a different co-operative every weekday.
It is within this context that Co-operatives Fortnight takes place. It is being described by organisers Co-operatives UK as an opportunity for co-ops to come together and give a more positive view of the movement.
“With the media scrutiny of the Co-operative Bank and Group, it has been a challenging period and this is now a vital time to stand up for co-operation,” says Co-operatives UK’s secretary general, Ed Mayo.
As well as Co-operatives UK’s media campaign to gain positive press coverage for co-ops, Co-operatives Fortnight will feature activities ranging from picnics and film nights to MP visits and in-store events.
CASE, which supports new and existing co-operatives in Leicester, is holding a celebration day with local trade unions and co-operatives. Jane Avery, the event organiser, explains that the celebration is intended to counter negative views of co-operatives.
“Co-ops are great” she says. “They have provided the solution for thousands of people in this city for over 165 years – whether that has been to find work, provide housing, develop affordable and accessible savings and lending institutions such as credit unions, or a local shop. As a business model, based on values and principles, it works well when those values and principles are put into practice.”
Consumer-owned co-operatives will be using Co-operatives Fortnight as a chance to highlight the positive contributions they make in their trading areas. Scotmid, for example, will run a consumer-focused social media campaign and a range of internal communications.
“We are very proud to be a co-operative,” says Malcolm Brown, head of corporate communications at Scotmid. “It’s what makes us different from other retailers. Co-operatives Fortnight is a great chance for people to find out the benefits co-operation can bring to businesses and local people. We’ll be highlighting the co-operative difference to our customers, staff and members.”
Midcounties, meanwhile, is running 14 events to highlight how co-operatives are local, loved and trusted. For Pete Westall, Midcounties’ group general manager for co-operative social responsibility, “Co-operative Fortnight is a great opportunity for all co-operatives to come together and show members, colleagues and customers the strength, the scale and diversity of the co-operative movement.”
In the context of 12 troubling months, Co-operatives Fortnight appears to offer co-operatives the chance to capitalise on the attention co-operatives have received and share a more positive message.
“Our impact as a co-operative movement is extraordinary,” says Ed Mayo. “Right across the UK, I have had the chance to meet with co-operatives that are serving communities, sustaining jobs and innovating for a sustainable and fairer economy. Co-operatives Fortnight is a celebration of the power of co-operation.”
In this article
- Chris Rhodes
- Co-operative Bank
- Co-operatives UK
- Coffee Cranks
- Consumer cooperative
- Ed Mayo
- Eighth Day
- Francis Maude
- Ian Rothwell
- Jane Avery
- John Lewis
- Malcolm Brown
- Mark Smith
- Midcounties Co-operative
- Patrick Gray
- Paul Flowers
- Pete Westall
- Radio 4
- Robin McMillan
- the Guardian
- the Telegraph
- Vivian Woodell
- Wine Society
- United Kingdom
- Top Stories