United Co-operatives' boss Peter Marks tells Julian Hunt why the co-operative movement should merge into a single society
Peter Marks has certainly raised a few eyebrows with his call for the creation of a single co-operative society. As we reported last week, the chief executive of United Co-operatives is not pulling any punches ('Unity rally cry goes out', The Grocer, March 25, p4). And catching up with Marks at his offices in Rochdale, where the first society was born, it is obvious that this 30-year veteran of the movement is in no mood to soften his message.
His biggest gripe is what has happened to the co-operatives' share of the food retail market since the 1960s and how this is now coming under renewed pressure. "Something has to happen and quickly because the growth of Tesco, Sainsbury, Asda and Morrisons is phenomenal," he warns. "They have driven us out of superstores and they are now trying to drive us out of c-stores. This is our last stand."
His concerns have been mounting for some time, but have been crystallised by his involvement in the project to develop a single Co-operative brand. "It's right that we look to renew the brand and make it more relevant to today's consumer. But I realised early on that this could not be managed by an incoherent, fragmented and ill-disciplined organisation with 40 different interpretations of the brand."
His verdict will surprise those who feel the project, which is still in trial phase, has been designed to ensure that the new brand will be rolled out in a disciplined manner. Marks acknowledges this, but warns that the mechanisms in place represent "the usual Co-op fudge" and fears they will not lead to the high level of discipline that has made CRTG, the movement's buying group, such a success.
He adds: "The co-operative movement has not planned to be this way. It has evolved. And if we were different businesses with different brands we would not be having this conversation. But consumers already think we are one brand."
The societies need to come together so that they can finally start to deliver on that unfulfilled promise, he says.
The benefits of developing a 'Super Co-op' are pretty obvious in terms of taking out overhead and duplication and driving out costs - in other words, having one of everything, not 40. Such a move would also create real focus in the business and lead to better prices, ranges and standards, says Marks, who adds: "When Tesco's Sir Terry Leahy says, 'This is how we will manage our brand', all his stores do as he says. But you can't do that with a fragmented business."
Marks points to his own organisation's creation through the merger of the Yorkshire and United Norwest societies as proof of what can be achieved. "We have driven out costs and invested the savings in our shops and in being more competitive."
The success of the merger is reflected in his society's impressive results for the year to January 22. Food, travel, car dealerships, healthcare and funerals together reported a 13% rise in sales to £1.88bn and profit jumped 23% to £43.7m. In its food group, sales were up almost 7% to £806m and its number of stores passed the 500 mark for the first time - with plans to keep growing.
Just think what could be achieved if that story could be replicated on a much larger scale, he says. That's the theory. But how would such a merger happen in reality?
"The movement is good at talking and we could win prizes for debating," admits Marks. "But time is moving on. We can't afford to debate for the next three years. There has to be a process if we all agree that this is the way forward. There has to be an orderly process to achieve it."
He adds: "I sense that even the diehard co-operators are beginning to realise that they can't fly in the face of economics and hard commercial facts."
Yet Marks accepts it would be impractical to try to get 40 societies merging in one go. Rather, he feels that the biggest ones - United, the Co-operative Group and Midlands - should get together, and then the others would follow pretty quickly.
"Hopefully my outburst might stimulate talks and might convert these talks into action - who knows. I have not got a plan or an idea of process. I don't have all the answers to all the difficult issues. I am not naive, I know people are not going to say 'let's do it tomorrow'.
"But if we want to be here in 20 years' time as a key player in food retailing, then we have to do something - and quickly."
Peter Marks has certainly raised a few eyebrows with his call for the creation of a single co-operative society. As we reported last week, the chief executive of United Co-operatives is not pulling any punches ('Unity rally cry goes out', The Grocer, March 25, p4). And catching up with Marks at his offices in Rochdale, where the first society was born, it is obvious that this 30-year veteran of the movement is in no mood to soften his message.
His biggest gripe is what has happened to the co-operatives' share of the food retail market since the 1960s and how this is now coming under renewed pressure. "Something has to happen and quickly because the growth of Tesco, Sainsbury, Asda and Morrisons is phenomenal," he warns. "They have driven us out of superstores and they are now trying to drive us out of c-stores. This is our last stand."
His concerns have been mounting for some time, but have been crystallised by his involvement in the project to develop a single Co-operative brand. "It's right that we look to renew the brand and make it more relevant to today's consumer. But I realised early on that this could not be managed by an incoherent, fragmented and ill-disciplined organisation with 40 different interpretations of the brand."
His verdict will surprise those who feel the project, which is still in trial phase, has been designed to ensure that the new brand will be rolled out in a disciplined manner. Marks acknowledges this, but warns that the mechanisms in place represent "the usual Co-op fudge" and fears they will not lead to the high level of discipline that has made CRTG, the movement's buying group, such a success.
He adds: "The co-operative movement has not planned to be this way. It has evolved. And if we were different businesses with different brands we would not be having this conversation. But consumers already think we are one brand."
The societies need to come together so that they can finally start to deliver on that unfulfilled promise, he says.
The benefits of developing a 'Super Co-op' are pretty obvious in terms of taking out overhead and duplication and driving out costs - in other words, having one of everything, not 40. Such a move would also create real focus in the business and lead to better prices, ranges and standards, says Marks, who adds: "When Tesco's Sir Terry Leahy says, 'This is how we will manage our brand', all his stores do as he says. But you can't do that with a fragmented business."
Marks points to his own organisation's creation through the merger of the Yorkshire and United Norwest societies as proof of what can be achieved. "We have driven out costs and invested the savings in our shops and in being more competitive."
The success of the merger is reflected in his society's impressive results for the year to January 22. Food, travel, car dealerships, healthcare and funerals together reported a 13% rise in sales to £1.88bn and profit jumped 23% to £43.7m. In its food group, sales were up almost 7% to £806m and its number of stores passed the 500 mark for the first time - with plans to keep growing.
Just think what could be achieved if that story could be replicated on a much larger scale, he says. That's the theory. But how would such a merger happen in reality?
"The movement is good at talking and we could win prizes for debating," admits Marks. "But time is moving on. We can't afford to debate for the next three years. There has to be a process if we all agree that this is the way forward. There has to be an orderly process to achieve it."
He adds: "I sense that even the diehard co-operators are beginning to realise that they can't fly in the face of economics and hard commercial facts."
Yet Marks accepts it would be impractical to try to get 40 societies merging in one go. Rather, he feels that the biggest ones - United, the Co-operative Group and Midlands - should get together, and then the others would follow pretty quickly.
"Hopefully my outburst might stimulate talks and might convert these talks into action - who knows. I have not got a plan or an idea of process. I don't have all the answers to all the difficult issues. I am not naive, I know people are not going to say 'let's do it tomorrow'.
"But if we want to be here in 20 years' time as a key player in food retailing, then we have to do something - and quickly."
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