Prospects for The Co-op’s food business are bright, despite the unethical revelations that accompanied the undoing of its banking empire.
Given the tabloid-friendly narcotic and sexual revelations that accompanied the unravelling of the Co-operative’s banking empire, one might be forgiven for being surprised that readers of Ethical Consumer magazine has just voted the Co-op the most ethical firm over the past 25 years.
While the antics of the Rev Paul Flowers, the Co-op Bank’s former chairman, might linger longest in the public consciousness, perhaps more concerning was the appalling lack of governance that let him reach the bank’s chairmanship in the first place.
Followed up by the leaking of Euan Sutherland’s salary and his parting shot as he left the group that it was ‘ungovernable’, it would be fair to suggest that the last 18 or so months have not been an object lesson in corporate governance or reputation management.
The report from Ethical Consumer states that its readers still see the Co-op as an “ethical business at heart” despite the recent calamities that have befallen it.
I can sympathise with that point of view, with the sense that recent problems and errors have been the result of institutional naivety and ineptitude rather than any malevolent undertow.
Hopefully, the necessary reforms and checks and balances will be put in place to make sure that such mistakes cannot be repeated and that the Co-op, which does have noble intentions at its heart, will avoid a repetition of recent humiliations.
Things are certainly looking up.
Disposals, such as pharmacies and farming, might sharpen the focus of the business, although the loss of the farms might lessen the organisation’s credentials in terms of vertical integration and provenance. That said, the prospects for the food business are looking brighter than they have for some time.
With larger stores being sold off, the food retail division’s impressive management team will be free to further improve and build upon the Co-op’s heartland of convenience retailing.
With more focused ranges, better pricing and enhanced execution on the operating side, strengths in areas such as fair trade, organics and local sourcing will come back to the fore, ensuring that the Co-op’s obviously strong ethical heritage will prevail against the recent turbulence.
A wonderful track record in doing the right thing now needs to be matched by an ability to do things right.
- Bryan Roberts is insights director at Kantar Retail