The Co-operative Group’s ‘divi’ is an icon of the grocery sector.
Those of a certain age can still reel off their membership number, and get misty-eyed recalling collecting stamps in stores.
So it was pretty significant when in April 2004 the society brought back the scheme after a near 30-year absence to give its members a twice-yearly share of its profits.
The scheme, which now also allows members to have a say in how the society is run, attend events and join campaigns, has since been well received by its seven million members.
It was therefore a bitter blow today when The Co-op revealed it was scrapping its interim dividend payout because there is simply no profit to share. The Co-op Group reported a loss of £599m in the six months to 6 July due to the well-documented troubles in its banking business.
To soften the blow, every time a member spends £5 or more between 18 November and 15 December, they will receive a voucher for 10% off their shopping. The vouchers will be valid until 24 December and can be used in any of The Co-op Group’s 2,700 stores.
The Co-op brand is already under considerable strain because of the banking problems, so it’s an announcement that comes at a bad time for the society. And it’s fully aware of this. The three Q&As on The Co-op’s membership website say it all – Why should I keep my Co-operative membership card? What is the point of being a Co-operative member? Why should I keep swiping my card?
It also admits members are unlikely to receive a full-year dividend: “We remain committed to rewarding our members but given that we are unlikely to declare a profit for 2013 this may well not be in the form of a traditional dividend.”
The divi has been a great USP for The Co-op, but as our story on the phenomenal success of the myWaitrose card shows, there are better schemes out there. Without a divi, The Co-op’s just another convenience operator. And there are better ones out there, too.
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