July 2019 Council meeting

Just back from a day at the National Members’ Council, listening to an extraordinarily wide range of presentations including an overview of progress from our CEO Steve Murrells (see image above),  a review of our franchising operation from Martin Rogers (see my blog below about visiting our Leeds Student Union franchise store), and an update on progress in recruiting and refocusing our network of member pioneers.  We also heard a report on how our responsible advertising policy is being implemented and the remarkable success we have had in enlisting the (unlikely?) support of the Sun for our campaign in support of Lord McColl’s bill to help victims of Modern Slavery.  In the last week the government has confirmed that victims will continue to be eligible for government support indefinitely rather than for only 45 days – one of our key campaigning asks. 

Best of all, however, was a presentation from Cathryn Higgs and Sarah Wakefield on progress with implementing our sustainable food strategy. It was great to hear about our shift to increase vegetarian, vegan and healthy eating options; our commitment to source all soy used in our supply chains from sustainable sources (an issue that is so much bigger than the more prominent palm oil debates); further action to reduce plastic usage and tackle food waste.  Perhaps the biggest surprise however was to learn that in terms of our carbon impact the total footprint of all our direct activities (transport, refrigeration, power for our stores etc) was only half that of the embedded impact of just the dairy products we sell.  So our new commitment to build on the 50% reduction in our own GHG emissions (achieved three years early in 2018) will now focusing on reducing the total impact of what we do including carbon emissions from our supply chains.  A big step but clearly the right approach in this time of climate emergency.

Questions to the directors were challenging as usual, focusing on the decline in members voting in our AGM, the need to give more attention to all parts of the UK in our publicity materials and charitable initiatives, and whether we could do more to help provide jobs for past offenders.   

The Council’s democratic processes also led to the re-election of Nick Crofts for a third two-year term as President, and the return of Lesley Reznicek to a vice-presidential role (she was President for a period before Nick was first elected).  With a range of fresh members elected to the Senate too it will be interesting to see how Council’s priorities will evolve for this next period.

A flurry of awards!

I was delighted to be one of the group receiving an award on behalf of the Coop Group at the Coops UK Annual Congress ten days ago.  Voted for by individual members of the co-operative movement, we won the prize for “Leading Co-operative of the Year” in recognition of the progress we have been making as a group over recent years.  I was also delighted to see a Lifetime award made to Roger Sawtell, an inspirational co-operative leader now in his 90s but who – among many other things – was involved back at the start of Traidcraft in the 1970s.

In the last month the Co-op has also won the Evening Standard’s Consumer Business of the Year Award, and the Grocer’s “Grocer of the Year” award – the latter being the first time we have ever one this prestigious industry recognition.  And to top all of that the CEO of our Food Business, Jo Whitfield, won the Veuve Clicquot Businesswoman of the Year award, recognising her leadership of our retailing arm and the work she is doing to encourage women in retailing.

Leeds University Union shop

Great visit with Head of Franchise Martin Rogers to see the new Co-op franchise store at Leeds University Union.  Only open for less than three months, it has already seen sales increase by 150% – a response to the excellent range and smart appearance of the shop and a recognition of shared values between the student body and the Co-op.  Run by the Student Union with a mix of permanent and student staff, it benefits from a dynamic team led by Karen the Union’s Retail Director. With wide aisles and the greatest number of self scan terminals in our estate, the shop looks really attractive, and the footfall while I was there was impressive.

Before visiting I had thought of university franchise stores mainly in terms of their being an excellent way of recruiting young people to become members of the Co-op and to get them to understand the Co-op values difference.  

However, what struck me forcibly on my visit is that these stores will also give us an opportunity to listen more clearly to the up-and-coming generation of shoppers, helping us to attune our ranges and sourcing approach to their needs.  For example, the greater proportionate demand for vegan and vegetarian food can allow us to try new ways of presenting that offer; and their demands on issues like removing plastic bottles will challenge us to move faster in an environmentally sustainable direction.  We already have a free water refilling service in this store, but have also introduced today a new range of water bottles made from recycled cardboard and plant-based plastics – Just Water.  

I was also pleased to see that rather than the Costa coffee point that we have in many stores, the Student Union had insisted on a Fairtrade coffee point! A further benefit of this store is understanding better the needs of the Chinese ethnic community, as students from the Far East form a significant proportion of the Leeds student body.

All in all this felt like the start of a dynamic two-way partnership in Leeds. Co-op has much to offer them in terms of an appropriate range and professional experience, and already they are seeing greater footfall in their building as a result, whilst we in turn have much to learn from their focus on a youth clientele.  Roll on many more franchise outlets in other universities!

Co-op elections

The Co-op has today started issuing notices setting out the agenda for our AGM on 19 May.  This marks the start of the election period for selecting new members of the National Members’ Council (one third of whom have to be elected or re-elected each year), and also for electing two Member Nominated Directors (MND’s).  

My second two year term as an MND comes to an end at the AGM, and I am standing for re-election for a third term.  This time, thanks to a change at the 2018 AGM, the term of office would be for three years.

The ability to campaign in such elections is very limited.  But you can see my electoral statements and a short two minute video here .

I am keen to continue on the Board in particular to continue championing ethics and sustainability, drawing on my Fair Trade experience.   But I also want to ensure we carry through improvements in all our key businesses, so they serve our members more effectively.  And there’s more to do to motivate equip and reward our colleagues better and to encourage members to become more involved.  Equally, at this time of national tensions and division, the active promotion of co-operative values and principles and the strengthening of local communities seems more important than ever. We need a thriving Co-op to demonstrate that there really is a better way of doing business.  With an in-depth understanding of the Co-op built up through four years on the Board, I hope I could contribute effectively in all of these areas.        

Those entitled to vote in the elections are Co-op members who spent at least £250 in the course of 2018 through our Food or Electricals businesses, as well as those who have taken out products from our Funerals or Insurance businesses.  For the last time, having accounts at the Co-operative Bank may also contribute towards a voting qualification.  Of our 4.5 million members about half will be theoretically eligible to vote, though in practice the turnout is often nearer 100,000.  

We would love to see more members actively engaged in this democratic process – one of the things that makes a co-operative different.  It is perhaps understandable that turnout is so low when membership is dispersed across the UK, when most regard their relationship with the Co-op mainly in transactional terms, and when people don’t really know any of the candidates. However, the hope must be that as we become more active in our engagement with local communities so the sense of belonging and ownership will strengthen and encourage more to participate in voting.

If you are entitled to vote you should receive a notice of the AGM by email in the next few days. If you think you should have received a voting email and it hasn’t arrived by 24 April please check your spam folder and if it isn’t there call the Co-op on 0800 023 4708 during normal working hours.

Please do participate in our democracy – and of course please consider voting for me!

Food waste and community

Spent Sunday afternoon and evening helping to run a first birthday party for the REfUSE cafe in Chester-le-Street. As one of the advisory board members supporting this social enterprise I helped to prepare and serve a celebration meal for 50 of the regular volunteers who keep this social enterprise going (along with 80 other regular volunteers – quite a cohort!).

REfUSE is the brain-child of two entrepreneurs – Nikki Dravers (the woman in black making a presentation in the photo – who in fact worked briefly for Co-op on food waste issues) and Mim Skinner. They collect surplus food from local supermarkets and wholesalers (including the Co-op depot at Birtley), and use it to provide meals on a Pay-As-You -Feel basis in their cafe. They also run catering for events (such as our 25th wedding anniversary in the summer!), support school holiday clubs and are about to install a training kitchen in their warehouse so that another local charity can train up people who have suffered from metal health challenges in catering/food preparation skills.

The cafe has become a sought-after venue for children’s groups, church groups and runs regular music nights. They were recently only one of eight organisations nationwide to receive government funding under the WRAP initiative to build up and extend their activities and install an industrial freezer facility.

It was amazing to hear the volunteers talking about what a difference the cafe has made to their own lives – providing them with a sense of community and purpose they had lacked, as well as feeling good about serving over 12,000 meals plus hot drinks to over 16,000 customers in the past year and saving 40 tonnes of food.

It is a great example of community action at its best, and would tick many of the boxes for the emerging themes from the Co-op’s Local Community Fund. Providing community spaces – the cafe is becoming a real hub for local groups; mental and physical well-being – REfUSE provides dignity, company and food to those who need it; education and training – both for the volunteers and the new catering training initiative as well as raising awareness of food waste and environmental issues.

It is great to have my small part to play in this amazing and impactful project. Well worth spending two hours peeling potatoes and then providing food service last night! You can find out more on Facebook at Re-f-use or look at their website www.refusedurham.org.uk

Member Pioneer Network

Had a great morning with Katharine Lam, Member Pioneer for the Stockton area, gaining some insights into the role and potential of Member Pioneers.

Although Katharine has only been in post for six months she has clearly brought a lot of energy, initiative and local connections to the role and has reached out to place the Co-op at the heart of networks in the area. 

So not only does she liaise with four stores, three funeral homes and the three local causes supported by the Co-op Local Community Fund in Stockton, but she has also been active in setting up and running a Bereavement Day with a wide range of organisations, taking Fairtrade assemblies into schools and arranging Fairtrade Fortnight events, supporting International Women’s Day, working with refugee groups and linking in to business networks.   And all this on just 20 hours per month!

We discussed the implications of potentially focussing the Local Community Fund more clearly on a smaller number of themes, and how the proposed new structure of Member Pioneer Co-ordinators for which we are currently recruiting was going to work.  

Our conversation also covered the challenge of how to encourage Co-op members to engage more with our democratic structures and help people understand that our ethical credentials were about the fundamentals of how we did business as well as supporting good causes.

Katharine gave me some real food for thought and useful pointers that I can hopefully feed into the development of our community strategies. 

At the last Board meeting our membership Director Matt Atkinson had described research  showing that the general public recognised that the Co-op’s employing pioneers on the ground to encourage and co-ordinate voluntary community activities was a tangible difference between our approach and the philanthropic “Corporate Social Responsibility” approach adopted by many other companies.  If we can expand our network from 300 to 1500 pioneers like Katharine, one can see just what an impact we could make. And at this time when we have an increased sense of social division in our society, the messages of co-operating for the common good and building stronger communities have never been more important.

April’s National Members’ Council

Spent Saturday at the Co-op Council meeting: where the main focus of discussion was the publication of our year-end results, which were published last week. You can see the full report at https://assets.ctfassets.net/5ywmq66472jr/4Xi9Pw36VOEkmE2yqZhCQT/4d716091dec9e6e8832a357c718ca47b/Co-op_Annual_Report_2018.pdf

Overall our underlying profit result was flat year on year.  But with strong growth in food sales and an increased Profit Before Tax line the reception in the financial press has been very positive.  Food’s performance was outstanding with like for like sales up 4.4% – well ahead of the market – and the addition of NISA taking the Co-op’s total turnover to over £10 billion for the first time since we disposed of the Co-operative Bank. Funeralcare results were a little disappointing, with a drop in market share and profitability impacted by our introduction of lower-cost funeral options.  However, we still have a very strong platform and many opportunities in that sector and I am confident that we will see that part of our business turn around.  

It was very pleasing that the press gave plenty of coverage to other aspects of our performance too, recognising in particular the work we are doing to address crime levels in local communities, the investment by our pension trustees in social housing and the expansion of our network of academies.  This year we published the Co-op Way report at the same time as our financial results – which is something I have pushed for over the last couple of years.  There’s lots more interesting and encouraging news to draw out from that report, which I will cover in a future blog post.

The Council session also spent a lot of time looking at our work on leadership and colleague culture as well as reviewing remuneration policies which are covered in huge detail in the Annual Report.

During the Directors Q&A sessions we were challenged on a number of areas, including:

  • Progress on our IT transformation programme in the Food division (slipping behind schedule which will increase cost and delay service improvements – but we need to take the time required to get it right).
  • Reactions to the Grocery Code Adjudicator’s report and whether we were confident that our house was being put in order now: as previously declared, we had got things wrong but were working hard to make sure we treated suppliers well.
  • Colleague security: a continuing area of concern, in which we continued to invest time and money. 
  • Whether it was easier to report to shareholders or to members: we find Council questioning ranges far wider than that of financially-focused shareholders, and appreciate the fact that members take a longer term and broader perspective 

Altogether a very positive day, and I very much hope that it does not prove to be my last Council meeting, as the next one will not be until after our AGM in May when I hope to be re-elected!

Global Impact Award

Excellent news last week that the Co-op won The Hermes Global Impact Award at the Retail Week Awards.

Championing Fairtrade products, contributing to local community, launching the Bright Future programme to help victims of Modern Slavery, recycling and the Future of Food strategy were all called out as examples of what puts Co-op ahead of most other businesses.

One of the judges said: “If it was about a single initiative or a campaign there were good entries, but in terms of multiple initiatives over time and the aggregate impact they have, the Co-op just stands out on its own. “The grocer shines a light on important issues like slavery and water – not always the ones that are popular. There’s a pure intent. Tackling modern slavery by offering a path back into employment is a great approach.”

Another judge commented: “The Co-op consistently delivers. It’s cultural across its business – the grocer doesn’t just talk about it, it lives and breathes it.  The Co-op has a strong, genuine sense of duty and community. It is properly entwined with every part of the organisation and it deserves to be properly recognised for that. The Co-op is staying true to its purpose of ‘championing a better way of doing business’, which makes it the worthy winner of this award.”

Reading these plaudits is most encouraging, and having just spent this morning reviewing the 2018 Co-op Way sustainability report at the Risk and Audit Committee, I know we have plenty more positive news to report on the sustainability front.  I was particularly pleased that the Committee met once again with our assurance providers, DNV, and that we considered their report at the same time as our draft financial accounts for the last year.  This to me symbolises the way that we give equal weight to our ethical and financial performance, recognising that the two can and should reinforce each other in a virtuous circle of creating a stronger Co-op the more we can be seen to be contributing to stronger communities and a more sustainable world.

Co-ops UK Retail Conference

It was good to spend Friday and Saturday at the annual Co-ops UK conference for members who are retailers, a great chance to share notes and build relationships. A good turnout of Co-op Council colleagues (some also wearing other hats) plus Gareth Thomas, Helen Grantham and myself from the Group Board and executive.

As usual one of the highlights was the presentation from James Walton, chief economist at the IGD (Institute of Grocery Distribution), with a masterly overview of trends in the marketplace and consumer attitudes.

Take home thoughts from his presentation included: * the impact of Brexit likely to be negative in short to medium term at least, with 40% of our food imported from the EU. * Consumer confidence is consequently at a record low ebb. * Although there is projected growth in grey sales over the next five years, most of this will be form inflation and a little bit to reflect population growth. * Convenience, discounting and online sectors would continue to grow whilst larger supermarkets woful continue to shrink. * Future shoppers will be much more conscious of both health and ethical issues – and even if they still excuse themselves when they consume less-ethical products they will not excuse big companies for ethical lapses. * Growth in plant-based diets seems likely to continue.

There were also useful sessions on trends in the funerals market (including a presentation from Alison Close of the Co-op) and a discussion of initiatives on food waste, tacking anti-social behaviour and making food provenance more transparent in local supply chains.

Final Fairtrade Fortnight update

Coffee with Mike Gidney – CEO of the Fairtrade Foundation (pictured above) – was an excellent chance to catch up with an old colleague and to mull over possible future initiatives for Fairtrade. We met in Esquires cafe in Durham – which as you can see was appropriately merchandised to support the fortnight.

We were particularly interested to discuss how to make careers in ethical food more accessible to students – recognising that for many the first steps in a career path would be in larger company where they could learn skills, but that retaining a focus on ethics in their early careers could then sometimes be challenging. We generated ideas around co-ordination of internship placements by the Foundation, creating positive peer support groups and tying more ethical inputs into initiatives such as Grocery Girls being promoted by the Food CEO of the Co-op, Jo Whitfield.

We also spent time reflecting on the Grocery Code Adjudicator, whose establishment Mike and I both campaigned for when at Traidcraft, and the irony that she was currently investigating the Co-op’s buying practices when Co-op was probably amongst the most ethical of all retailers. Although we await the outcome of those investigations, we both agreed that the focus all retailers were now having to put on handling supplier relationships better was a major step forward. The improvements in god practice across the major retailers in the last two years have really been very marked. However, the scope of the Code was limited to UK suppliers at the moment, so did not really provide direct help to Fair-trade and other overseas producer groups – perhaps that’s a next stage to campaign for.

And then on Friday I was at the AGM of Shared Interest – an organisation that lends to fair trade producers who cannot access commercial finance, and on whose Board I have served for four years. It had been an encouraging year for Shared Interest, and it was inspiring to hear of the impact that well-judged lending could have in equipping small groups for expansion that could extend fair trade benefits to hundreds more workers. But chatting to other supporters – many also keen members of the Co-op – it was also clear that they remain disappointed by the degree to which our stores can get behind Fairtrade Fortnight. There are practical and logistical barriers to be overcome, but I think they are right that we need to try harder in future years.