Wednesday, 4 July 2012


Book Review

150 Years of Lincolnshire Co-operative by Alan Middleton, Published by Lincolnshire Co-operative Ltd 2011. ISBN No: 978-0-904327-11-3

I love histories of Co-operative Societies although they are of variable quality so I was delighted by my first impression of this book as it is a stunningly produced illustrated history of one hundred and fifty years of retail co-operation in Lincolnshire. Having read it however I see it also contains a very important extended essay, using Lincolnshire as a case study, of the ingredients for successful retail co-operation. Author Alan Middleton and Editor in Chief Ursula Lidbetter deserve credit in producing a book which not only marks a significant milestone but is also an important contribution to the thinking about the future of retail co-operation.

The story, whilst told in relatively few words, sets the formation and development of the society in its social and economic context yet does not avoid the challenges along the way. It is one of continuous development but there is no sense of inevitability about it. It is clear that at key moments the Society could have taken a different road and there are important lessons for the way in which decisions where taken and how those vital relationships between managers and members where fostered and how together they overcome difficulties in maintaining growth and development.

A recurring issue that would not have concerned the pioneers but has been vital to the society’s success – is the importance of good corporate governance. Alan Middleton who served the Society as a director for 40 years, a good part of the society’s history, is a champion of good governance for co-operative societies and through this history he explores its importance as a driver of success.

There is insufficient space in a short review to describe all the twists and turns in this history but what we can see is that from its inception it is a Society that is both fiercely independent and yet deeply embedded in the community it serves. From when the Lincoln Equitable Industrial Co-operative Society was founded in 1861 by Thomas Parker a joiner from Gainsborough and began trading from 1, Napoleon Place Lincoln, when goods where sold only for ready money and after the first quarter they had 74 members and where able to pay out a dividend of nine old pence, the society’s mission was the “domestic, social and intellectual advancement of its members.”

In 1863 the society asked its members, “to have faith in the lovely principle of co-operation and cast your mountain of woe unto the sea.” By 1876 they had established an education committee and having raised £18 from concerts and readings opened a reading room twenty years before Lincoln’s first public library. By 1898 when Peter Kropotkins, Fields, Factories and Workshops was published the society was mentioned in passing for its work in horticulture and in rural areas an issue which commands a couple of chapters in the book and marks its expansion from the City of Lincoln to the wider county.

Today the Society is still deeply committed to its locality not just by sourcing local produce but by also using its property portfolio to drive countywide economic development. In modern times the Society has thanks to that good corporate governance been blessed by outstanding leadership in the form of Keith Darwin, another Gainsborough boy, and Lincoln born Ursula Lidbetter. Between them since 1992 in just 20 years they have thoroughly modernised the Society taking the turnover from £130million to over £270million, tripling the profit to over £20million and enabling a fourfold increase in dividend to £4million.

Mere statistics however undervalue the importance of the Society to the life of the county. In a spirit of Kroptkin’s Mutual Aid the Society established and continues to support Lincolnshire Co-operative Development Agency and the Society has ensured his other work the Conquest of Bread with its own bakery which supplies bread to others as well as its own stores.

So to what do we attribute the society’s success? Alan Middleton offers the following, “The Board of any co-operative society is key to its success or failure. With the introduction of professional management in the 1940’s it became necessary to establish the correct balance between them and the board. It would take many years to get this to the very best level. However, more than anything it is the willingness of the Lincolnshire board to do its job and only its job, and to do it well, that sets it apart from so many boards of societies long gone.” A lesson for consumer co-operators everywhere.

In Fields, Farms and Factories Kropotkin wanted to reunite the brain worker and the manual worker which he felt had been separated by the division of labour. Lincoln shows how workers by hand and brain can be successfully united and I warmly recommend this book not only as a beautiful embellishment to any co-operative coffee table but as an important education tool for how to run a modern retail co-operative society.

Tuesday, 3 July 2012

Anglia Regional Co-op Back from the Brink!

There was a debate within the Co-operative retail sector about the merits of national versus regional societies. To put it crudely the idea was that to be competitive the movement needed the economies of scale of a national society to compete. The other side of the argument was that our key competitive edge was in being close to our stores, communities and customers and that was more easily achieved in a regional setting.

It is because those ideas have never been resolved and the spate of mergers that have taken place mainly into the Co-operative Group that we have the current patchwork of national and regional co-operative retail coverage today. They have in common however the need to constantly to turn over their assets to ensure they have the kind of offer their members and customers want to use.

A Society that exemplifies these issues and the dramatic changes the movement has had to face over recent years is the Peterborough based Anglia Regional Co-operative Society.

Its roots go back to 1876, when a travelling salesman from the north sold tea from a canvas covered area in Peterborough. To help the widow of a local railwayman he gave five per cent of his takings to the widow, selling 1,400 lbs of tea that night and raising her £12. He also gave out coupons to his customers which they could exchange for gifts. His rival traders argued that this put him in breach of the Lottery Act and, although magistrates sentenced the man to two hours’ detention, his actions inspired the locals.

The very first meeting of the Peterborough Co-operative Society took place in his tent!

That story highlights three issues the movement has always faced, hostility from capitalist traders, the often inadequate legal basis for co-operative business and crucially that if you want to return something to the community you have to make a surplus!

More recently the modern Anglia Regional Society was born of a merger between the Greater Peterborough and Waveney Regional Societies in 1987.

Why the history of this society is so important is because it was central to another key argument over trade should we concentrate on food or non-food? With the formation of the Co-operative Group it took the key decision to pull out of what is called non-food. I am sure many readers have fond memories of Co-operative Department stores selling clothes and furniture. For decades they were the symbol of co-operative retailing. Until very recently Anglia was a champion of this type of retailing with stores as far north as Berwick and as far south as Cinderford.

They were convinced that there was a future in the town centre department store model. There was a perception that if the society could grow sufficiently large there was a point at which this type of retailing could be profitable. Their peak was reached in 2005 when the Society took 9 stores off the Co-op Group to add to the twenty plus it already had.

Sadly customers and member’s tastes changed, out of town retailing for furniture and clothing took hold and the point of profitability disappeared into the distance. You could not say however that they did not try to make the format work.

Then the credit crunch and in austerity Britain there came a point when the debt that the stores where racking up and poor trading where endangering the whole of the Anglia Society. Clearly some radical surgery was needed but everyone in the movement was caught out by the boldness of the Anglia management team’s approach.

With a thousand jobs at risk Anglia came up with an imaginative solution. Whilst keeping the freehold of the stores it has transferred nineteen of the department stores to Beales PLC. Whilst trading under the Beales brand the stores will continue to operate AHF furniture and carpets, Co-operative Travel, Anglia Co-op Optical and Stylistics hair and beauty concessions with Beales being committed to honoring the co-operative dividend.

Then later in 2011 the other part of Anglia’s non-food estate Anglia Home Furnishings (AHF) was transferred to its staff as a going concern. This single transfer made AHF amongst the largest workers co-operative in the country. With nine stores of its own and trading through ten department stores and an online presence this is a business, with a turnover of over £14 million.

All three elements have been freed to concentrate on what they are good at. Beales is good at department stores, AHF has pioneered new store formats that have set it off to a flying start and Anglia has been free to focus its full attention on the core businesses of Food, Funerals and Specialist Retail and most importantly ensuring value for the members. In the first half the Society overall achieved an Operating Profit of £2.65m. This may not seem much but is a huge advance on the loss of £0.2m at the same time last year. During the period the Society has again significantly reduced borrowings and are now opening new stores and growing again.

Whilst these changes may have been forced on Anglia due to changes in the trading environment they have been made sensitively with the minimum impact on employees. Meanwhile the Society has been using the advantages of the electronic membership system to good effect in rewarding customer loyalty. The system also allows members to donate their ‘divi’ to the Anglia Co-operative Community Fund (ACCF). As I write over £700,000 has been awarded to good causes. So from 1876 to today the principles of giving members good value and supporting those in need still holds true!