Co-op boss Richard Pennycook has advocated the Co-op as an example of a different way of doing business after the debacle of the BHS collapse.
Group CEO Pennycook highlighted the co-operative way of trading, for members rather than shareholders, after taking issue with an editorial in yesterday’s The Times newspaper.
Pennycook said the editorial, which reflected on the collapse of BHS, concluded that ‘No more productive system has ever been devised than market exchange and capitalism’.
“I thought I ought to put The Times, and its readers, straight on that point,” he told Co-op members in a blog published by the mutual.
“As you know, the Co-op is a different and very successful way of doing business and has been for 170 years.”
Pennycook, who was recruited to the role of group CEO to save the then Co-operative Group from the crisis precipitated by its 2013 banking scandal, argued his case in a letter to the paper.
“The article on the collapse of BHS suggests that ‘no more productive system has ever been devised than market exchange and capitalism’,” he wrote. “There is an alternative. It’s called the Co-op and it is a different way of doing business.
“As a sector, co-ops contribute £34bn to the UK economy through more than 7,000 businesses owned by more than 17 million members who live and work in the communities we serve.
“Being owned by the people they trade with means co-ops aren’t driven by short-term returns to shareholders or subject to the whims of private owners. Our owners have a direct say in how our businesses are run and how our profits are invested.
“Co-ops have had their challenges. The Co-op I lead faced a near death experience a couple of years ago, which other business models arguably wouldn’t have survived.
“But being owned by members meant long-term decisions taken in the interests of the many not the few. Decisions which saw the Co-op and the 70,000 jobs we support survive and now begin to thrive.
“We all feel most for the people caught up in the collapse of BHS but if the fallout shines a light on a different way of doing business that benefits us all, some good will have come of it.”
Since its 2013 collapse, Pennycook has secured The Co-op’s survival ably assisted by a leadership team that includes chairman and retail veteran Allan Leighton and CEO of retail Steve Murrells.
Its ‘rescue’ phase is now over and it is in its ‘rebuild’ stage, to be followed in 2018 by the final ‘renew’ stage of the turnaround.
This autumn it will begin its new membership proposition with 8.4 million Co-op members entitled to receive 5% back on every own-brand Co-op product they buy plus an extra 1% for community good causes. The group says it expects to be able to hand back £100m a year to members through the proposition.