150 years of the Co-operative Group

Tony Webster (Liverpool John Moores University)John Wilson (University of Newcastle)

Rachael Vorberg-Rugh (The Co-operative College)

150 years of the Co-operative Group: Seeing the future from the past

The Co-operative Business History ProjectOct 2013: the first major Business History of the English

Co-operative Wholesale Society & Co-operative Group 1863-2013 – to coincide with 50th anniversary

Why? 1950-1990s years of decline & the dominance of the ‘investor-led’ model of the private firm neo-liberalism – BUT since then – Renaissance!

1990s – reorganisation & the emergence of the new ‘Co-operative’ identity; success of Co-op Bank; mergers with Britannia Building Society & Somerfield – takeover of Lloyds TSB branches

The crash of 2008 & the revival of the co-operative idea – ‘Big Society’ – the ideal time for a reappraisal

The long journey of British co-operation‘Rise & Reign’ - British co-operative development,

1850s-1950s

‘Retreat’ - co-operative decline, 1960s-90s

‘Renaissance’ - reversal of fortunes since 1990s

First CWS offices, Manchester, 1863

CWS headquarters,1913

Rise & reign of British co-operation (1)Response to the socio-economic changes of

industrialisation by workers & artisans – spread across Britain, especially N. England

Strong influence, Owen & Christian SocialistsThe Rochdale Pioneers – ‘Rochdale Principles’

of consumer co-operation 1850s – proliferation of societies,

supply issues1863 – formation, Co-operative

Wholesale Society (CWS)

Rochdale Pioneers Museum

The Rochdale Pioneers

The Rochdale PrinciplesOpen membershipDemocratic control – one member one vote regardless of

size of investmentFixed interest on capital - shares invested in the society

received a low, fixed rate of interestDividend on purchases - - part of trading surplus used to

pay dividend to members, based on purchases not sharesSale of unadulterated goodsReligious & political neutralityCash not creditEducation

Growth of British co-operation

The trader: Here, missis, you may be a ‘social miracle’ but you take up a lot of room

Daily Dispatch (May 25 1904)

CWS – wholesaling to co-op societies; by 1870s, production & CWS Bank

International depots by 1870s/80s (New York, Copenhagen, Rouen, Hamburg) – sourcing meat, fruit, wheat, flour (Greece), cheese & butter (Ireland)

National reach – Newcastle & London branches, system of saleroom & depots

Scottish CWS (1868); establish joint work, 1874

Rise & reign of British co-operation (2)

CWS London branch c1881

First CWS factory, Crumpsall, 1871

Early 20th century co-operative store

The CWS-owned SS Unity, 1904

Co-operative Congress, 1895

Development of CWS production – shoes (Leicester, Heckmondwike); drapery (various), flour (Dunston mill); ceramics

...some failures! Coal mines in 1870sCWS = a bridge between producer co-op societies

& local consumer co-ops – not always successful

Expanding global reach – tea plantations in Ceylon(Sri Lanka) early 1900s; palm oil in West Africa

Rise & reign of British co-operation (3)

Workers at CWS tea plantation, Ceylon, 1903

CWS operations, c1920

= distributive (salerooms, depots, etc)

= productive (factories, farms, etc)

Biscuits

Bacon

Tea

Zenith = World War Two!Walton & Gurney –importance of social & educational

activities in cementing a ‘culture of co-operation’ – important in ensuring local co-op consumer loyalty

Political dimension – committed to non-partisan neutrality at first – but effects of capitalist hostility & other issues lead to creation of Co-operative Party, WW1

Eventually allied to Labour – an uneasy relationship – because of Labour’s statism & TU links

Problems post WW2 – growing competition – Co-operative Independent Commission 1958

Rise & reign of British co-operation (4)

Poster, c1940s

CWS adverts, c1930sCWS Band, c1940s – co-operative bands and choirs date back to the 19th century

Children’s parade, c1930sCWS Travel Department, established 1937

1960s-1990s – a period of difficulty!Failure to implement CIC reforms & unify movementDeath of reformist CEO Thomas,19681973 – merger SCWS & CWS (financial crisis) –

CWS moves into retailingCo-operative Bank – becomes

mainstream bankCo-operative society mergers

(financial problems; piecemeal & unplanned) 1960 = 875 societies,1980 = 200

Retreat, 1960-1990 – and its roots (1)

Former SCWS headquarters, Glasgow

Co-operative market share

High of 21% in 1950s; low of 4.4% in 2000; 5th largest UK food retailer with 8% market share in 2010

First meeting, Co-operative Commission, 1955

Earlyself-service store, Pendleton, c1950s

Counter service, c1940s

Promoting bakery & milk deliveries, London (left) & Worcester (right), c1950s

Emergence of Co-operative Retail Society (CRS) as a rival to CWS

Longstanding problem of dispersal of power – Co-operative Union, CWS & CRS – hard to achieve coherent leadership & direction

UK co-op society formation in mid 19th century – an already mature & competitive environment

The primacy of ‘localism’

Retreat, 1960-1990 – and its roots (2)

Dividend token,CRS Swansea

Bus adverts, Co-operative Bank, 1971

Dividend stamps promotion, 1970

Leeds’ £100,000 computer (left), and Addlestone’s supermarket, both c1960s

CWS vs local societies – differing views of CWS’ role

Co-op societies preferred variety of suppliers; CWS aspired to be main or even sole supplier

DYSFUNCTIONAL FEDERATION

Late 20th century, mergers = emergence of large regional societies with aspirations for greater independence from CWS! (Ekberg)

Problems of internal conflict & poor leadership

Retreat, 1960-1990 – and its roots (3)

CWS experimental supermarket, c1960s

Superstore in Oldham, c1980s

Department store, c1980s

Lancastria convenience store, c1980s

Supermarket in the Midlands, c1980s

Co-op Bank & Fair Trade – ethical commerce!1993 Co-operative Retail Trading Group (CRTG) –

CWS & several large regional societies - co-ordinated buying for member societies

Sale of CWS manufacturing to Hobsons (Regan)Mid 1990s, Melmoth at CWS & re-establishment of

co-operative values & identity1997 – defeat of Lanica takeover bid

– the new approach is strengthenedThe emergence of the ‘family of

co-operative businesses’ concept

Renaissance – the 1990s (1)

Co-operative storefront, 2011

Andrew Regan (far left), Graham Melmoth (left), and some of the newspaper headlines during the attempted 1997 takeover of CWS (top left)

All co-operative brand chocolate & coffee were certified Fair Trade in the 2000s

2000 – new Co-operative commission = confirms the revival of a distinctive co-operative identity

Focus on convenience stores in retailing2002 – merger of CWS & CRSMerger of CIS & Co-operative Bank

to form CFS, also 20022002 – the Co-operative Group –

much more integrated and cohesive commercial organisation

2009 – Somerfields acquisition, CFS merger with Britannia Building Society – general revival of fortunes!

2012 - Lloyds-TSB branch acquisitions

Renaissance – the 2000s (2)

The Co-operative Group’s 1st annual report

The first meetingof the Co-operative Commission, 2000& its report, 2001

Co-operative Group advertising, 2009

HQ of the CWS since 1963 (left); drawingsfor new Group HQ, to open in 2012

‘Falling to the centre’ – concentration of societies = eventually made the emergence of unified leadership easier to achieve

Helped by the process of late 20th century retreat & decline! A growing sense of urgency for change

Changes in leadership – a new generation – the survival of the co-operative ideal – both in membership and in a rising generation of managers

Avoided demise as in France, Austria and Germany

Renaissance – Why?