The possibility of the society becoming a major player in franchising was first raised in an interview with The Grocer in March, in which Malcolm Hepworth, chief operating officer for retail, revealed that it was considering whether franchising could add worthwhile volumes to its sales.
He said: “We’ve evaluated the model and it looks strong. It could be an area we look at as long as it does not detract from our other operations.”
He also pointed out that the Co-operative Group owned
several retail brands including Alldays and Balfour, so its franchise operation would not need to carry the Co-op brand.
The search was revealed in an advert in The Grocer (July 3, page 63) which sought an experienced senior retail professional to become head of franchising at its Manchester headquarters and offered a salary around £75,000 plus benefits.
It noted that the society inherited a 29-strong franchise operation when it took over Alldays in October 2002, and said the head of franchising would be expected to develop an operation “to drive our market penetration deep into the independent sector”. The advert said: “In a consolidating market, we believe there is a role for supporting independent businesses in order to maintain local communities and genuine diversity of choice.”
A spokesman confirmed that debate had moved on within the co-operative movement. Previously some members had argued that a co-operative society owned by its members could not operate a franchise system with privately owned retail businesses. But he said it was no longer a case of whether the society should have a franchise operation but how it could be developed.
He said: “We see expansion in that area, but it is too soon to say how and where. The new head of franchising will be expected to develop a business model that is distinctly co-operative and provides strong growth.”
The Co-operative Group was a bidder for Londis, which would have given it critical mass in franchising, but Musgrave won the battle for ownership of the symbol group last month.