John Marren loves to tell the one about the poinsettias. In 2013, 10,000 of the bright red Christmas flowers were donated to Community Shop, the social supermarket Marren founded that year to sell heavily discounted surplus food to the poor. “And we fed the flowers to the homeless.” 

I pause. “That’s the face I wait for,” he grins. “We actually sold them in Company Shop - and all the money we would’ve paid for them was then credited to Community Shop so they could serve bacon, eggs, sausages and tomatoes.”

It sums up the “alchemy” between Company Shop - a thriving commercial operation, which Marren founded in 1985 to sell surplus to food industry workers via factory outlets and their own stores - and Community Shop, its social enterprise offshoot, which launched in 2013. “Community Shop has the best possible chance of success because it’s part of Company Shop,” adds commercial director Tom Rumboll.

It’s certainly worked so far. The third Community Shop store will open in Athersley in South Yorkshire next week. And thanks to its unique dynamic, it will supply a full range of groceries to 750 members at a discount of up to 70%. Fresh meat, fruit & veg, tinned soup, bread, babyfood and toiletries will all be stocked across its 3,500 sq. ft store as it can tap into goods from across the network.

So, whereas otherwise a “massive donation of cereal” from one local business might leave a social supermarket heaving under the weight of cornflakes, the partnership means Company Shop will sell off excess to its 80,000 members and leave Community Shop with the credit to pick from the huge stock of surplus that passes through its Sheffield DC instead.

A bulletproof model

Marren was so convinced the model would work “we paid for the first two stores ourselves”. The first in Goldthorpe, Yorkshire, opened in December 2013, and it’s been so successful since its arrival, it lifted the area from the top 3% for deprivation to outside the top 10%.The second, in West Norwood, opened 12 months later and its 750 members spend up to 90% of their food budget in the store. That’s 3.2 million meals a year served up by “one little shop” says Marren.

Having proved the model works Company Shop sought external funding for its third store in Athersley, with the Coalfields Regeneration Trust (a charity that invests in social impact projects) investing £250k in start-up costs and a full store fit-out, and Barnsley council contributing a further £100k capital.

And this investment won’t only deliver cheap food, Marren insists. All profit is ringfenced and reinvested back into stores to provide the limited pool of members, all of whom rely on income support, access to personal development programmes too.

These courses range from simple Kickstart programmes that require attendance at two to three group sessions, to more in-depth courses on budgeting and debt management, or getting back into work, with 67% of those eligible (20% of the total) being supported back into jobs by the scheme.

company shop

Each store also links up with about 25 external support organisations, including the Citizens Advice Bureau and mental health services. And members (124 of which have trained to be peer mentors) even set up their own.

Head of engagement Gary Stott points to leaflets for a new member-led slimming club propped on one table at the Goldthorpe store. “Every day we have something happening in our community kitchen which is about fundamentally recalibrating our view of what we’re doing when we handle food,” he adds.

“As we’re making chicken curry, we’ll ask who did the cooking at home? What was their favourite meal? It’s not about health or nutrition but getting people to light up when they’re talking about food rather than telling stories of eating toilet paper to keep themselves full so they could feed their kids.”

Ultimately Community Shop is “a high-impact social enterprise model,” says Rumboll. “However, it’s underpinned by stopping food going to waste. The engine of it is waste. Or food as we would call it.”

It’s not too different from the 14,000 sq ft Company Shop store 20 minutes down the road from Goldthorpe in fact. “People at Community Shop say they couldn’t afford to eat that quality of food if not for the store, and the people at Company Shop say they couldn’t afford to go on holiday if it weren’t for the savings they make,” says Marren.

How Company Shop’s model differs

And the impact in terms of food waste prevention is impressive too: 30,000 tonnes of surplus food pass through the commercial DC each year (around two thirds of the total 47,000 tonnes of edible food Wrap says is redistributed across the whole UK), before it’s sold at one of 29 factory shops or four Company Shop-owned stores, the biggest of which sits on a Sheffield industrial estate next to its DC.

The difference is the membership base: up to 10,000 workers from the food and drink industry browse its aisles each week filling trolleys (“you’ll notice there are no baskets here”) with surplus groceries that cost as little as one third the retail price. Heinz soups, M&S Spirit of Summer snacks, Tesco steaks and Aldi cereals are all selling like hot cakes in the packed-out store. You could easily be standing in one of the major mults minutes down the road. Don’t retailers mind?

“They love it,” says Marren. Not only does it prevent food waste but the ‘membershop’ model protects their brand reputation. “The retailers work closely with us.”

Two thirds of products are currently own label, with all the major mults - bar Lidl - giving approval to Company Shop to intercept surplus at their suppliers. As to why the surplus arises, there’s no doubt some reasons are baffling. A small labelling error, a touch too much salt, or seconds spent too long in the oven. The weather is another factor. Marren remembers particularly the Queen’s Jubilee. “Everyone was having garden parties and the factories were all producing burgers and sausage rolls. And then the heavens opened. The parties were cancelled, and with it all the party food.”

And competition also plays a part. “Someone decides to go very cheap on a promotion. That affects the other supermarkets who’ve already put their orders in.” All of which can leave tonnes of edible food downgraded to animal feed, energy or in the bin.

Winning suppliers

Company Shop’s solution is to pay manufacturers 5%-20% of the retail value to resell across their outlets, leaving it a more profitable option than disposal via animal feed, AD or landfill in most cases.

But “we’re not a valid sales channel,” says Rumboll. “We’re not encouraging anyone to supply us - but when you do, you know you’ll save cost, recover some revenue, protect your brand and the retailer you supply - and it’ll never end up in landfill.”

Manufacturers clearly like the proposition: 81 new manufacturing sites signed up in 2015, boosting turnover by 7% to £33.4m. And the company is targeting another four sites by the end of 2017.

company shop customer

Convincing suppliers can be tricky though. “Once bitten, twice shy,” Rumboll adds. “They say we tried redistribution before and someone sued us. But that wouldn’t have been through us and it might have been 10 years ago. There’s been less than pukka operators in this space over the years and sometimes that’s a hurdle for us.”

Some suppliers fear rejected products in retailer-branded packs could end up being shipped back to the supermarket, thus incurring fines if they aren’t binned. “But we have this amazing innovation to deal with that,” adds Rumboll. “It’s a roll of tape with ‘Company Shop’ on it” that’s wrapped round rejected surplus at a factory.

“The solutions are so easy,” as are the ways to cut waste in the first place. Putting a tray at the end of a manufacturing line to catch rejects - rather than letting them fall in the bin. Or lining a container to keep food edible. “And phone us,” laughs Rumboll. “It’s really easy things, it’s just a change of thinking.”