Co-op retailers are operating in a fast-changing and competitive environment, with constant shifts in consumer demand creating pressure to keep pace.
These pressures come from all directions; consumers are demanding more choice and convenience but at the same time are more ethically aware in their shopping decisions. And there is increased competition in the retail market, with low cost disruptors and a volatile economy putting pressure on the bottom line. Meanwhile, the leading supermarket chains are taking a leaf from the co-op sector’s book with their charity fundraising and community support programmes. Asda, for instance, now runs a network of more than 350 community champions who work with local groups and charities.
This makes it important for co-op retailers to work harder to assert their difference. High-profile examples include the Co-op Group’s network of member pioneers, its modern slavery campaign, its commitments on single use plastic and work developing compostable carrier bags. And there are continued efforts across the retail sector to build the latest energy-efficient technology into stores.
The co-op movement also made a strong commitment to the Fairtrade movement after Sainsbury’s broke away with its own certification.
These efforts continue: last month, the Group’s policy director Paul Gerrard, one of the key players in its modern slavery campaign, attended a roundtable session in Brussels, organised by EuroCoop, the European federation of consumer co-ops, to discuss ways to build ethics into supply chains.
Where the Group has drawn flak, it has responded with campaigning work – for instance, after staff protested that one-on-one shifts in its stores posed a security risk, it launched its Safer Colleagues, Safer Communities campaign. Similar initiatives on crime and anti-social behaviour have been carried out elsewhere in the retail co-op movement.
The demands of a fast-moving retail market has pushed co-ops to form partnerships with other businesses. The most recent to be announced by the Co-op Group is a deal with sushi brand YO! to supply its customers with Japanese food on the go.
The deal runs at the Group’s new store in Moorgate, London, and meets the growing demand for fresh fare. It will see the store stock more than 10 YO! products including vegan sushi, chicken katsu bites and crispy salmon rolls. The store is the third in the Group’s “on the go” format, following launches at Manchester Piccadilly and London’s America Square. It features the retailer’s newest ethical innovations, including a free water refill station and Gro vegan range.
But another growing area of consumer demand – home shopping – has seen the Group form a partnership with gig economy platform Deliveroo on a grocery delivery scheme.
The advantages of partnering with Deliveroo, which has gone through the costly business of developing a workable app and has a ready-made national network, is clear – but it is also one of a number of platform operators to be criticised for their employment practices. This has spurred the rise of the platform co-op movement, extensively covered by this magazine, which creates worker-owned alternatives. This includes CoopCycle, a European federation of bicycle delivery co-ops, some of which were formed by disgruntled Deliveroo riders.
Dom Sztyber, a spokesman for the the Independent Workers’ Union of Great Britain, (IWGB), who has worked as a Deliveroo rider, said: “There are huge problems with Deliveroo and plenty of news articles highlighting their appalling treatment of riders. We’re very disappointed the Co-op has chosen to partner with them as it seems to be in direct conflict with their values.”
He says IWGB has been challenging Deliveroo over the employment status of its riders; he says they are currently classed as self-employed. IWGB wants riders to be classed as self-employed, dependent contractors who are entitled to holiday pay, the minimum wage and pension contributions.
Changes to Deliveroo’s terms have led to pay cuts, adds Mr Sztyber. “When including costs like vehicle maintenance, insurance, tax and holiday pay, a lot of riders won’t be making minimum wage.”
He also repeats allegations which have been made by riders in the platform co-op movement that Deliveroo’s algorithms, determining delivery times and costs, are “opaque”, and that the company has penalised riders who complain.
Oliver Sylvester-Bradley from Open Co-op, which is working to develop a collaborative economy in the UK and has taken part in platform co-op initiatives, adds: “Co-ops have a duty, under Principle 6, to support other co-ops – we strengthen the movement by working together.
“Working with companies like Deliveroo, that exploit freelance workers by denying their employment rights, is the antithesis of Principle 6.
“Its primary objectives are profits, completely at odds with the co-op ethos. Co-ops should avoid getting into bed with any business that undermines the rights of its workers and should seek to support co-op alternatives instead, and establish these where they do not exist.
“In Barcelona, Madrid, Bordeaux and Berlin, riders have started delivery co-ops after negative experiences of working for Deliveroo, but it is not easy work. The Co-op Group, with its significant resources, is in a unique position to help kick-start a delivery co-op here in the UK.”
Chris Conway, head of digital and e-commerce, at the Group’s Food division, responded: “The way we do business matters and our commitment to co-operative values can be seen in the ongoing work we do to protect endangered spaces, provide outstanding educational opportunities for young people and promote safer communities.
“It is vital to our continuing success that we look at ways to evolve our offering and that our ranges reflect the ever-changing needs of our customers and members.
“We have recently launched our first-ever plant-based range, Gro, and are rapidly expanding the Co-op’s e-commerce proposition so that we can stay ahead in a very competitive retail landscape.”
He adds that the Group often works with trusted external partners who have the expertise and scale to help it achieve its goals.
“In turn, this can drive greater sales, create jobs and help us to deliver our social goals and community-led programmes.”
The Group says it prides itself on treating its colleagues fairly and expects the same of its suppliers and partners.
“Deliveroo is committed to working with us as a preferred partner and we aim to support them and share our knowledge of how we treat our colleagues, and they have also agreed to support our 1% community fund,” it says.
“Deliveroo has confirmed that all its 15,000 self-employed workers in the UK earn on average £12 an hour on its fee per delivery model, which is above the National Living Wage.”
Deliveroo says is “proud to offer flexible work to more than 30,000 self-employed riders”, adding: “Riders who choose to work with Deliveroo tell us that they want the freedom to decide when, where and how often they work with us, balanced with security,” it says, adding that it provides free insurance for riders. “Our riders have a strong voice within the company and our flexible model is based on their direct feedback.”
But the co-op retail sector also faces challenges from other directions. When the vegetarian, vegan, organic and wholefood movements were in their infancy, co-ops were leading the way, with notable success stories such as Yorkshire-based Suma Wholefoods and Manchester’s Unicorn Grocery.
But, just as corporate supermarkets have tried to steal some of the co-op sector’s ethical clothes, the growing popularity of plant-based diets, bolstered by concerns over the global environmental crisis, means they are now growing their presence in a market previously led by niche independents.
Kellie Bubble, from Unicorn, says: “It is wonderful that social and environmental considerations are influencing customer behaviour.
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