The Co-op store in Ballater is among the first to be newly adorned with an old logo that reaches back to the mutual retailer’s past.
The Golf Road shop now sports the historic blue clover leaf badge as the Co-operative Group unveiled plans to overhaul its membership structure and restore its battered reputation.
The credibility of the Manchester-based mutual was tarnished after its Co-operative bank division nearly collapsed in 2013. It had to be rescued by its bondholders, which includes a collection of US hedge funds, after a £1.5billion black hole was discovered in its balance sheet.
At its annual meeting in Manchester on the weekend, the co-op, which includes retail, funeral care, insurance, electricals and legal services, pledged to boost membership as well as restart payment of the co-op “divi” from 2018.
The group also announced that members would will start receiving a 5% reward for any purchases they make of Co-op own brand products and services, with a further 1% being added to a pot to be donated to local causes. The effort is expected to make the Co-op’s convenience stores more competitive to more of the “big four” retailers which have been discounting goods to maintain sales.
The group estimates the benefits, which will start in autumn of this year, will cost £10million a year across its Scottish operations, and £100million across the UK by 2018.
The turnaround is being lead by chief executive Richard Pennycook, who last month asked for his pay to be slashed 60% as the changes take hold.
The group reported an 81% fall in profits to just £23million, on turnover of £9.3billion in 2015. However this pre-tax profit figure was in comparison to when it made £121million on the sale of its pharmacy and farms business.
Yesterday Steve Murrells, chief executive of Co-op Retail, said he was confident that the rise in membership attracted to the discounts and dividends would “compensate for the investment we are making”. The group aims to raise membership from 5million to 6million in the next five years.
He added: “This is what the Co-op is all about. Big business is often accused of taking money out of communities – we are putting it back in as we champion a better way of doing business for our members and their communities.
“Our intention is to return to paying a dividend again, but we also want to make the rewards for members who trade with the Co-op more meaningful and community focused. We’re already seeing good momentum across our businesses and this will drive further growth which our members and their communities will benefit from. It clearly demonstrates the Co-op difference being delivered every day.”
