Consumer owned co-operatives – strategies for growth

Ahead of speaking at Co-operatives UK’s annual retail conference at the end of February, Rodrigo Gouveia, Secretary General of Euro Coop, the European trade body for consumer owned co-operatives, provides a guest blog on strategies for growing consumer owned co-operatives in difficult economic times.

European consumer co-operatives are very diverse. From market leaders in retail in some countries to small one-shop experiences in remote villages in others, from very well commercially integrated societies to dispersed and fragmented ones, from very large multi-businesses to small specialist ones.

But despite this variety they all share the same values and principles –which make them unique and creates a bond that brings them together.

In some European countries consumer co-operatives are very successful. In Finland, for example, they are market leaders with a market share of 43%, operating all types of stores, from large hypermarkets to convenience stores, and are active in many different activities such as petrol stations, hotels, restaurants, car dealerships etc.

Two out of three of all Finnish households have at least one co-operative member. Consumer co-operatives also lead the retail market in Italy, Denmark and Slovakia and are among the top five retailers in several other European countries.

Overall there are more than 4,500 consumer societies in Europe with a network of 35,000 points of sale that generate an annual turnover of more than €74 billion (£62 billion), employ 450,000 workers and are owned by more than 30 million consumer-members.

Despite the general success of consumer co-operatives in many countries, there are big challenges that face them. Competition in the retail market is fierce with large players like Carrefour or Tesco and the economic and financial crises put an even greater pressure on the market. To face these challenges there are at least two strategies that need to be developed in a more efficient way.

First, it is important that consumer co-operatives manage to differentiate themselves from other market players. This can be done by bringing forward the co-operative values and principles and conducting a commercial activity which is closely linked to them.

There are many interesting experiences in Europe but they need to be developed further. Although the economic crisis is a big challenge, it also represents a great opportunity for co-operatives to really show their ethical way of doing business and meet the public’s general feeling that this is the way companies should behave.

Second, it is important to explore the potential of cross border co-operation among consumer co-operatives. In many countries consumer co-operatives have made a great effort to consolidate their market position through mergers, acquisitions, commercial integration, etc. However, experiences of consolidation and integration at pan-European level are few and modest.

Co-operation among co-operatives is one of the basic principles of the co-operative movement but it seems to always find many obstacles.

The potential is clear: consumer co-operatives have the largest range of outlets in Europe, they have a combined turnover that is second only to Carrefour, they have a close link to the territories where they are established and they have a unique link to the consumers they serve. If, somehow, they can unleash this potential they will certainly be the strongest retail force in Europe.

2012 the International Year of co-operatives is a good opportunity to follow this path. The International Year should not serve only to commemorate the success of co-operatives but also to set a legacy for the future. Now is the time to take the opportunities that exist and to be ambitious.

Co-operatives UK’s retail conference is the only event for co-operatives in the retail sector. 24 to 26 February 2012. Stratford-upon-Avon.

Read more and book now at www.uk.coop/nrcc