Southern Co-operative’s business plan sets out sustainable future

One of the UK’s largest independents has launched a business plan outlining its strategy for future success.

Chief executive Mark Smith and his team at the Southern Co-operative (TSC) have just produced Our Plan 2014-2016 – a 28-page document explaining their vision to employees, members and partner organisations.

The brochure is being rolled out across TSC’s catchment area – Berkshire, Bristol, Devon, Dorset, Hampshire, Isle of Wight, Somerset, Surrey, Sussex, Kent and Wiltshire.

Mr Smith, who has been CEO since 2008, said: “There were two main objectives. The primary audience is people who work for us so they are absolutely aware of the journey we are on, what we are trying to achieve and why it’s happening.

“Employers like John Lewis get fantastic results by engaging with employees and we are trying to create some of that by communicating directly with the 5,000 people who work for us.

“The other target audience is our members and the third-sector stakeholders who buy into what we do, so they can see the potential.

“We are doing several things at once. We are showing how we operate commercially in terms of expanding and our future plans. We are also demonstrating the co-op difference both in execution of the brand and demonstrating our genuine purpose to support the community and the environment to our employees and partner organisations.”

The new initiative marks the second time in five years the society has launched a business plan.

“The previous one was similar in setting out what we plan to do in terms of growth so there has been no major change of strategy,” said Mr Smith.

“However, we decided it was time to turn up the volume around issues such as sustainability and show how they are an integral part of our day-to-day business.”

The Southern Co-operative has 187 Co-operative food stores, 21 franchised Welcome stores, 51 stores with sub-post offices, two Starbucks franchises, 45 funeral homes and a masonry business. There is a florist shop, supported by an Interflora- accredited online floristry service.

The society also offers Co-operative Independent Living Home, a shopping and e-business offering a wide range of mobility
and daily living aids, designed to make everyday activities easier for the elderly.

Its Lakeside HQ in Portsmouth provides support and services including payroll and IT to all its food stores and funeral homes, with a central help desk to provide a 24-hour contact point.

Since 2010, the society has grown by more than a quarter, reaching total sales of £327m in 2013. The business plan sets out how TSC plans to take those impressive successes forward in tough economic conditions.

“Trading conditions remain difficult and the wider economy challenging, so it is important we remain focused on our core business areas and are clear about our future business priorities,” said Mr Smith.

A key part of the plan is Making a Difference – TSC’s new sustainability strategy which addresses issues such as climate change and the rising demand for resources with ambitious plans to reduce carbon emissions, cut waste, save energy and water and champion local wildlife and countryside.

Mr Smith said: “We need to be mindful of these challenges, addressing the risks they present but also taking advantage of the opportunities – not just because it is the right thing to do but because it makes good business sense.”

Another sustainable success highlighted in the plan is the Local Flavours range, using local suppliers, with around 1,500 product lines currently selling across 11 counties.

“We have introduced locally produced milk into our Isle of Wight stores. And, through a unique partnership with Chichester College, called Routes To Market, we are helping local producers and businesses to take their idea, develop it and sell it to their best route to market.”

Now the plan has been launched, events will run over the rest of the year with senior management, including the CEO, on hand to answer questions.

“Our initial launch event was at our Lakeside HQ in Portsmouth and was aimed at getting our key members up to speed,” said Mr Smith. “We will also be going out into stores and meeting with as many colleagues as we can.

“It’s all been very positive so far. The feedback has been great and people have welcomed this overview of our business, particularly our sustainability plans.”

In the past few years TSC has invested more than £73m in developing the business, with plans for 50 more food stores and 15 more Funeralcare homes.

Mr Smith added: “As a successful independent co-operative, our priority is to re-invest our profits back into the business for the long-term benefit of our members.

“Over the past three years we have shared in excess of £6.6m with members. In 2013 this amounted to £2.6m, an increase of 15% on 2012, reflecting the continued growth in our business and in members joining us. We are the best performing co-op nationally in this respect.”

At a time when other parts of the co-operative movement are experiencing serious difficulties, the Southern Co-operative anticipates its profit share for members will be just as healthy as in 2013, reflecting a payout of 2p in every £1.

“Down here it is fiercely competitive,” said Mr Smith. “We have to compete head-on with competitors like Sainsbury’s Local and Morrisons and be just as good as them, so we have focused on where we are strongest. We will carry on expanding, adding 50 more stores and taking on new projects.

“But what this plan shows is that it is also about doing it all in a way that shows the business difference, which is that there is a purpose beyond profit. We are reinforcing the message that we can push forward in tandem with concern for sustainability, and re-invest in our business in the interests of members and wider community.”