At the Channel Islands Co-operative, the dividend proposition is an important part of the tangible benefits the society is offering to members. The dividend is in cash, not points, and is paid annually as 4% on most purchases.
Members receive double dividends if they shop on Tuesdays and Wednesdays, a move taken by the society in order to spread trade away from busy weekends.
“It’s an easy system to understand,” said Colin Macleod, chief executive of the co-operative. He explained how members received stamps, something tangible that can be handed over at the end of the year in return for goods. The dividend offer is promoted online, in stores and through commercials. It is very important to the jigsaw, but only part of the bigger picture, said Mr Macleod.
The society decided to focus on offering location, ease of access and value to its customers. It also has the same price proposition in all of its stores – promoting social inclusion and fairness.
“It is expensive, threatening profitability at larger stores. The temptation would be to push prices in smaller stores, but if you build a community message, it’s very difficult to get away from. It’s very valuable from a commercial perspective,” he said.
With 34% of the market share, and £1,500 spent per member per year, the society is prospering. It also benefits from the lack of competition from Asda, Lidl and Aldi. The biggest competitor is Waitrose.
The co-op operates 27 stores, with an annual turnover of £153m.
It also has an online member engagement tool, where individual members can track their estimated dividend, update data and make suggestions, leave feedback or participate in surveys.