Co-operative economy holds steady in face of an ‘awful year’

The collective turnover of the co-operative economy has increased to £37bn, despite the troubles affecting the Co-operative Group.

However, the Co-operative Group’s reported £2.5bn loss for the year ended 4 January has slowed the growth of the movement, with total turnover just increasing by 0.7%. In the previous year, turnover increased by 3.3% to £36.7bn.

In its annual report, The Co-operative Economy 2014, Co-operatives UK found that the co-op economy has grown 13.5% over the past five years, while the GDP of the UK as a whole only increased by 6.6%. But in 2013, GDP rose by 3.1%, while the co-operative sector only saw a 0.7% increase.

During the year, the number of co-operatives rose 2.5% from 6,169 to 6,323, but the total number of members fell by 300,000 to 15.1m.

The Co-op Group is still the largest co-op, with a £12.8bn turnover. Over the past year, John Lewis has grown its turnover to £10.1bn to keep its number two spot in the report’s list of top 100 co-ops by turnover.

Ed Mayo, secretary general of Co-operatives UK, said: “The co-operative sector is in good health. While it has undoubtedly been an awful year for the UK’s largest consumer co-operative, the Co-operative Group, away from this one business the wider co-operative economy has proved itself to be dynamic, resilient and growing. Up and down the country, over 6,000 other co-operative enterprises are operating healthy and sustainable businesses, trading ahead of the economy at large.”

Across the regions, England showed an increase from 4,875 registered co-operatives to 4,997. Turnover grew by £340m to £30.2bn on 2013′s report. Scotland reported a decrease on the previous year with total turnover dropping £100m to £4.2bn. The number of co-operatives registered climbed from 593 to 608.

In Northern Ireland, turnover fell from £1.13bn to £1.1bn, but the number of registered co-ops increased from 255 to 261. The number of co-operatives also improved in Wales, with figures rising from 446 to 457, but again, reported turnover fell from £1.54bn to £1.5bn.

A number of new entrants have been added to the list – either following a merger or being newly recognised as a co-operative. Central England Co-operative, the merged entity of Midlands and Anglia retail co-ops, is listed in fifth position with a £798m turnover.

Hotel chain Best Western has been recognised as a co-operative. With a turnover of £17.2m, it enters the list at number 77. The chain, which operates as a non-profit membership association, works with over 270 independently owned hotels across the UK.

A number of housing organisations have also been newly recognised as co-ops, including Grand Union Housing Group (£53.4m); Clwyd Alyn Housing (£28.7m); Hexagon Housing (£24m); Melin Homes (£24m); Argyll Community Housing (£18.7m); and Watmos Community Homes (£13.6m).

The bar for entry in the top 100 list has also been raised. Last year, co-operatives reporting turnovers over £8m made the listing, but now businesses need to make £10.8m to enter the top 100. A number of well-known businesses are now outside the list, including the Phone Co-op and West Lothian Lesiure.

The report also highlights that there are now more member owners of co-ops, at just over 15 million, than there are direct shareholders of businesses in the UK. This makes the co-operative sector the country’s largest membership model, with more members than the TUC, National Trust and RSPB combined.

Added Mr Mayo: “Focused on member needs, co-operatives have the responsiveness, support and momentum to make them the most resilient form of enterprise in the UK. Without that clarity, and faced with the challenge of restoring the Co-operative Bank back to health, the Co-operative Group has indeed faltered.

“However, while co-operatives are not immune to the stresses and strains faced by conventional businesses, this report is concrete evidence that the expanding co-operative sector is made up of resilient, ambitious and profitable enterprises.”

• The full report is available at www.uk.coop/documents/co-operative-economy-2014