End of year review 2016: Retail


February: Group buys 15 Budgens stores in continued expansion

The Co-op Group has bought 15 Budgens convenience stores as part of expansion plans for its Co-operative Food retailers.

March: Drivers halt strike action

Strike action was cancelled by Co-op Group drivers over the proposal to transfer 87 staff to haulier Eddie Stobart. Over 700 drivers across Newcastle, Northern Ireland, Derbyshire, Coventry, Inverness, Lanarkshire and Thurrock had been balloted, with 77% voting for strike action.

April: Co-op Group back on track, CEO takes pay cut

One year into its rebuild strategy, the Group reported a “stable” income and increased underlying profits for the financial year ending 2 January 2016. Chief executive Richard Pennycook, who took a voluntary pay cut, said 2015 had been a year of “further progress”.

Chief executive Richard Pennycook addressing the AGM on 21 May 2016
Chief executive Richard Pennycook addressing the AGM on 21 May 2016

April: New appointments to board

The Group announced new appointments at board and executive levels. Ian Ellis, chief financial officer, was appointed to the board with effect from 6 April 2016, taking up a previously vacant executive position. Lord Victor Adebowale joined the board as independent non-executive director.

April: Kath Harmeston gains whistleblower status, but only just

The Group won its legal battle against a former director who claimed she was sacked because she exposed malpractice among its executive. Procurement chief Kath Harmeston was not unfairly dismissed, ruled Manchester Employment Tribunal. But the Group did fail to pay her expenses within a reasonable period due to the information she disclosed, the court ruled. Thus she achieves whistleblower status in this one, relatively minor instance. The tribunal dismissed 15 other claims that her disclosures led to mistreatment.

May: Return of the Co-op as Co-operative Group rebrands

The Co-operative Group brought back its iconic blue cloverleaf Co-op logo, to be rolled out across its entire business over the next few years. The move was announced at the AGM in Manchester on 21 May, with delegates given a first look at how the logo will be used.

June: Funeralcare opens 1,000th home

The Co-op Group’s Funeralcare division opened its 1,000th funeral home, in Ashtead, Surrey. The site is one of the first to take on the new Co-op branding, and features a reception room, two family arrangement rooms and a service chapel.

July: Group sells 298 stores to McColl’s

The Co-op Group has agreed the sale of 298 of its Food stores to McColl’s Retail Group for £117m. The sale will see all staff transferred over to McColl’s and the stores will continue to trade after the handover, which is expected to take place in November. The money raised is to be reinvested into the Co-op Group’s strategy of focusing on convenience retailing and strengthening its membership offer.

August: New-look membership announced

The Group said members would start to receive their new membership cards – and start benefiting from the relaunched membership scheme – from Wednesday 21 September. Announcing the date on the Co-op Blogs, Group chief executive Richard Pennycook praised “18 months of hard work by colleagues all across the organisation” in the lead up to the launch. From this date, all members will benefit from the 5% and 1% reward scheme announced at its AGM in May. This will see 5% of the value of the Co-op branded products bought given back to the member, with an additional 1% given to local causes chosen by members.

Mayor of Appleby Hughie Potts is served by Co-op manager Ian Peacock at the pop-up store in Appleby in Westmorland, Cumbria
Mayor of Appleby Hughie Potts is served by Co-op manager Ian Peacock at the pop-up store in Appleby in Westmorland, Cumbria

October: Group wins for awards including Convenience Retailer of the Year

The Co-operative Group won four major prizes at the Retail Industry Awards, including Convenience Retailer of the Year. Food-to-go Retailer of the Year and Outstanding Achievement also went to the Group, while Ian Peacock, based in Appleby-in-Westmorland, Cumbria, was crowned Store Manager of the Year for his community work after floods hit the area last December. The Group was also highly commended in the Fresh Flower Retailer of the Year category, making it the highest-winning supermarket at the industry’s ‘Oscars’. Aldi came second with three gongs, while Tesco and Morrisons won an award each, with the latter commended in another category.

November Campaign calls for Co-op Group to rethink advertising policies

Following calls by campaign group Stop Funding Hate (SFH) for the Co-op Group to pull advertising from certain newspapers, chief executive Richard Pennycook says the retailer is exploring how future policy can address advertising decisions. Co-op Food and Co-op Insurance advertise regularly in the Daily Express newspaper, which the SFH campaign says is “notorious for its relentless campaign against minority groups, including refugees and migrants”. Mr Pennycook stated that the Group is “looking at our advertising for next year to see whether we can align it more closely with our natural sources of support rather than more generic media advertising”. However he cautioned that “this is under consideration but no conclusions have been reached”.


March: Lincolnshire bags green award

Lincolnshire Co-operative, which pioneered a different refrigeration gas in its fridges, received Environmental Project of the Year award at the ACR News Awards, for the air conditioning and refrigeration industries.

March: Co-ops sign sustainability pledge

The Co-op Group and Central England Co-op signed the WRAP Courtauld Commitment 2025. WRAP (the Waste and Resources Action Programme) works with UK governments and other funders to help deliver their policies on waste prevention.

April: Retail co-op success in CRI

Three co-operative societies were included in Business in the Community (BitC) Corporate Responsibility Index survey 2016. Central England, Southern and Midcounties were all included in the report, which helps businesses to assess their responsible business practice.

May: Heart of England defends store closure

Heart of England had a “justified reason” to close its non-food store in Nuneaton, said a review by Crowe Clark Whitehill LLP. The report concluded that keeping the store in Abbey Street would have been a “drain on the society’s resources”. The firm was commissioned by the society’s board to review the viability of the Nuneaton store as well as the process the board had undertaken to reach the decision to close the non-food division. Members of the co-op had voted for a motion to stop and review the store closures.

July: Scotmid awarded FairTax mark

Scotmid joined other co-ops to become one of the retailers awarded the Fair Tax Mark. Launched in 2014, the mark is the world’s first certification scheme for businesses behaving responsibly on tax. The mark has been awarded to 21 organisations, including the Co-op Group, the Phone Co-op, Co-operatives UK, the Co-operative Party, and retail societies Midcounties, Radstock and East of England. Enterprises must show they are paying the right amount of tax, at the right time, in the right place.

July: Co-op leaders appointed BitC responsible business ambassadors

Two co-op chief executives were made Business in the Community’s (BitC) responsible business ambassadors. Mark Smith from Southern Co-operative and Minnie Moll, from East of England Co-op, will represent the responsible business movement in their regions.

East of England's Coggeshall store during Sourced Locally Fortnight
East of England’s Coggeshall store during Sourced Locally Fortnight

July: East of England Local Food Fortnight generates £900,000

East of England celebrated its second Sourced Locally Fortnight. Sales beat last year’s total by 10%, putting £913,111 back into the local economy. The society’s Sourced Locally range forms part of its commitment to promote local food, with 3,500 products supplied by more than 100 different producers.

August: Landmark store for Southern

Southern Co-operative’s 200th convenience store opened in its original home city. Formerly known as the Portsea Island Mutual Co-operative, Southern’s first food shop opened on Charles Street, Portsmouth, on 9 May 1873. It now operates across Berkshire, Bristol, Devon, Dorset, Hampshire, Isle of Wight, Kent, Somerset, Surrey, Sussex and Wiltshire. The 200th store is just seven miles from the original.

August: Co-op bag donations top £5m

Retail co-ops donated almost £5m to good causes after the sale of almost 118 million plastic carriers under the 5p green levy. Once a payment for VAT is deducted, the rest of the money goes to good causes in the community. In the first six months of the charge, retailers sold 117,969,945 carriers, bringing in over £5.9m. After the VAT deduction and other expenses, co-ops donated £5.077m to good causes.

September: Central England LEDs the way

Central England announced the installation of LED lighting in over 100 food stores. In 2015 the co-op became the fourth organisation worldwide to achieve all four Carbon Trust Standards. It has LEDs fitted at 114 stores, and will now install the system in a further 118 food stores over 12 months.

December: East of England recognised for its dementia-friendly training

East of England Co-op won a Princess Royal Training Award for linking skills development with community investment. The judges were impressed by its dementia-friendly retail awareness training, with four training modules for 4,500 staff.

Paula Nickolds has been appointed managing director at John Lewis (Image: Greg Funnell John Lewis)
Paula Nickolds was appointed managing director at John Lewis (Image: Greg Funnell John Lewis)


March: John Lewis reports profit fall in spite of market share increase

The employee-owned John Lewis Partnership’s (JLP) results for 2015 said it had increased its sales and market share in 2015 but tough market conditions led to a profit fall. The partnership operates John Lewis department stores and Waitrose supermarkets.

November: Paula Nickolds made John Lewis managing director

JLP appointed Paula Nickolds as its managing director, effective from January. She is the first female MD in the organisation’s 152 year history and replaces Andy Street, who is stepping down to run as Conservative candidate for Mayor of the West Midlands.


February: Co-ops recognised in farm animal welfare report

The Co-operative Group and Swiss food retailer Coop were recognised in the top two tiers of the 2015 Business Benchmark on Farm Animal Welfare (BBFAW) report – a global measure of achievement on management, policy commitment, performance and disclosure.

August: Edinburgh Bicycle Cooperative shuts Manchester store
After nearly a decade trading in Manchester, the Edinburgh Bicycle Cooperative store in Rusholme announced its closure. The cycle hub repair in the town centre also shut. This follows the closure of its Sheffield store in March, leaving five remaining outlets in Aberdeen, Leeds and Newcastle, with two in Edinburgh and an online store.

November: Community Impact Index

The Community Impact Index, supported by Midcounties, was released to represent the seventh co-operative principle, concern for the community. In 2015, an average of 10% of a retail co-op’s profits went back to the community – more than double the amount competitors give.

September: Global Co-operative Youth Forum launches manifesto

Young co-operators met in Bulgaria for the Consumer Co-operatives Worldwide Global Youth Forum, with 26 delegates from across 13 countries, including two colleagues from Midcounties Co-operative. Participants looked at the policies of national consumer co-operative organisations for the recruitment of youth and for the participation of youth in the management of co-ops.


Ursula Lidbetter
Ursula Lidbetter is looking forward to a new member-engagement programme

What were your highlights and lowlights of 2016?

Lincolnshire Co-op is leading a multi-million pound Cornhill Quarter project to revitalise part of Lincoln city centre and one of my biggest moments of the year was seeing that take shape. A key feature is the Corn Exchange, built in 1879. The moment work began on it was particularly special – modern extensions which had been added were removed and suddenly the historic building was revealed in all its glory.

Another highlight was our Community Health Pod, which toured 17 locations, giving more than 600 free health checks and 1,000 body mass index assessments. It also highlights what a valuable resource our pharmacies are.

One of our biggest challenges was the government’s proposed cuts to community pharmacy funding and changes to the service. Our members and patients rallied alongside us, signing the national petition against the proposals which gathered more than two million signatures across the country.

The proposals have been modified, mitigating some of the more drastic ideas which would have changed community pharmacy forever. Serious cuts remain so we’ll continue to make strong representations.

What are you most looking forward to and what are you most worrying about for the retail sector – and the co-operative movement in general – next year?

We’re rolling out a brand new programme of member engagement which is very exciting. As well as new events such as localised members’ forums, dividend card holders can sign in to our website and access exciting offers and exclusive discounts from other local businesses, attractions and places to eat. It’s all about giving our members more.

Our Community Champions scheme is going strong and we’ll be raising money for homeless charities until February. The 14 local groups will benefit from a donation every time a member shops in our outlets with their card, as well as the proceeds from staff fundraising and the carrier bag levy.

Our travel branches collected gifts to donate to the charities before Christmas, our pharmacies have given flu jabs to homeless people in supported accommodation and we’re collecting toiletries.

In terms of challenges, the impact of Brexit is something we’ll all have to carefully consider. We have some great colleagues who are EU nationals and we will watch out for changes which may impact them.

The way the Pension Protection Fund Levy is calculated disadvantages mutuals and we’ll be supporting Co-ops UK on its campaign to highlight this.