The Rise, Retreat and Renaissance of British Co-operation: The Development of the English Co-operative Wholesale Society and the Co-operative Group, 1863-2013

1. 150 years of the Co-operative Group:
Seeing the future from the past
Tony Webster (Liverpool John Moores University)
John Wilson (University of Newcastle)
Rachael Vorberg-Rugh (The Co-operative College)

2. The Co-operative Business
History Project
Oct 2013: the first major Business History of the English
Co-operative Wholesale Society & Co-operative Group
1863-2013 – to coincide with 50th anniversary
Why? 1950-1990s years of decline & the dominance of the
‘investor-led’ model of the private firm neo-liberalism –
BUT since then – Renaissance!
1990s – reorganisation & the emergence of the new ‘Cooperative’ identity; success of Co-op Bank; mergers with
Britannia Building Society & Somerfield – takeover of
Lloyds TSB branches
The crash of 2008 & the revival of the co-operative idea –
‘Big Society’ – the ideal time for a reappraisal

3. The long journey of British co-operation
‘Rise & Reign’ - British co-operative development,
1850s-1950s
‘Retreat’ - co-operative decline, 1960s-90s
‘Renaissance’ - reversal of fortunes since 1990s
First CWS
offices,
Manchester,
1863
CWS headquarters,1913

4. Rise & reign of British co-operation (1)
Response to the socio-economic changes of
industrialisation by workers & artisans – spread
across Britain, especially N. England
Strong influence, Owen & Christian Socialists
The Rochdale Pioneers – ‘Rochdale Principles’
of consumer co-operation
1850s – proliferation of societies,
supply issues
1863 – formation, Co-operative
Wholesale Society (CWS)
Rochdale Pioneers Museum

5. The Rochdale Pioneers

6. The Rochdale Principles
Open membership
Democratic control – one member one vote regardless of
size of investment
Fixed interest on capital - shares invested in the society
received a low, fixed rate of interest
Dividend on purchases - - part of trading surplus used to
pay dividend to members, based on purchases not shares
Sale of unadulterated goods
Religious & political neutrality
Cash not credit
Education

7. Growth of British co-operation
The trader: Here, missis, you
may be a ‘social miracle’ but
you take up a lot of room
Daily Dispatch (May 25 1904)

8. Rise & reign of British co-operation (2)
CWS – wholesaling to co-op societies; by 1870s,
production & CWS Bank
International depots by 1870s/80s (New York,
Copenhagen, Rouen, Hamburg) – sourcing meat,
fruit, wheat, flour (Greece), cheese &
butter (Ireland)
National reach – Newcastle & London
branches, system of saleroom & depots
Scottish CWS (1868); establish joint
work, 1874
CWS London branch c1881

9. First CWS factory, Crumpsall, 1871
The CWS-owned SS Unity, 1904
Early 20th century co-operative store
Co-operative Congress, 1895

10. Rise & reign of British co-operation (3)
Development of CWS production – shoes
(Leicester, Heckmondwike); drapery (various),
flour (Dunston mill); ceramics
...some failures! Coal mines in 1870s
CWS = a bridge between producer co-op societies
& local consumer co-ops –
not always successful
Expanding global reach –
tea plantations in Ceylon
(Sri Lanka) early 1900s;
palm oil in West Africa
Workers at CWS tea plantation,
Ceylon, 1903

11. CWS operations, c1920
Biscuits
Bacon
= distributive (salerooms, depots, etc)
Tea
= productive (factories, farms, etc)

12. Rise & reign of British co-operation (4)
Zenith = World War Two!
Walton & Gurney –importance of social & educational
activities in cementing a ‘culture of co-operation’ –
important in ensuring local co-op consumer loyalty
Political dimension – committed to non-partisan neutrality
at first – but effects of capitalist hostility & other issues
lead to creation of Co-operative Party, WW1
Eventually allied to Labour – an uneasy
relationship – because of Labour’s statism
& TU links
Problems post WW2 – growing competition
– Co-operative Independent Commission
1958
Poster, c1940s

13. CWS Band, c1940s – co-operative bands and
choirs date back to the 19th century
CWS Travel Department, established 1937
CWS adverts, c1930s
Children’s parade, c1930s

14. Retreat, 1960-1990 – and its roots (1)
1960s-1990s – a period of difficulty!
Failure to implement CIC reforms & unify movement
Death of reformist CEO Thomas,1968
1973 – merger SCWS & CWS (financial crisis) –
CWS moves into retailing
Co-operative Bank – becomes
mainstream bank
Co-operative society mergers
(financial problems; piecemeal &
unplanned) 1960 = 875 societies,
1980 = 200
Former SCWS headquarters,
Glasgow

15. Co-operative market share
High of 21% in 1950s; low of 4.4% in 2000;
5th largest UK food retailer with 8% market share in 2010

16. First meeting, Co-operative Commission, 1955
Counter service,
c1940s
Early
self-service store,
Pendleton, c1950s
Promoting bakery & milk deliveries, London (left)
& Worcester (right), c1950s

17. Retreat, 1960-1990 – and its roots (2)
Emergence of Co-operative Retail Society
(CRS) as a rival to CWS
Longstanding problem of dispersal of power –
Co-operative Union, CWS & CRS – hard to achieve
coherent leadership & direction
UK co-op society formation in mid 19th century –
an already mature & competitive environment
The primacy of ‘localism’
Dividend token,
CRS Swansea

18. Leeds’ £100,000 computer
(left), and Addlestone’s
supermarket, both c1960s
Dividend stamps promotion, 1970
Bus adverts,
Co-operative Bank, 1971

19. Retreat, 1960-1990 – and its roots (3)
CWS vs local societies – differing views of CWS’
role
Co-op societies preferred variety of suppliers;
CWS aspired to be main or even sole supplier
DYSFUNCTIONAL FEDERATION
Late 20th century, mergers = emergence of large
regional societies with aspirations for greater
independence from CWS! (Ekberg)
Problems of internal conflict &
poor leadership
CWS experimental supermarket, c1960s

20. Supermarket in the Midlands,
c1980s
Superstore
in Oldham,
c1980s
Lancastria
convenience
store, c1980s
Department store, c1980s

21. Renaissance – the 1990s (1)
Co-op Bank & Fair Trade – ethical commerce!
1993 Co-operative Retail Trading Group (CRTG) –
CWS & several large regional societies - co-ordinated
buying for member societies
Sale of CWS manufacturing to Hobsons (Regan)
Mid 1990s, Melmoth at CWS & re-establishment of
co-operative values & identity
1997 – defeat of Lanica takeover bid
– the new approach is strengthened
The emergence of the ‘family of
co-operative businesses’ concept
Co-operative storefront, 2011

22. All co-operative brand chocolate & coffee
were certified Fair Trade in the 2000s
Andrew Regan (far left), Graham Melmoth (left),
and some of the newspaper headlines during the
attempted 1997 takeover of CWS (top left)

23. Renaissance – the 2000s (2)
2000 – new Co-operative commission = confirms the
revival of a distinctive co-operative identity
Focus on convenience stores in retailing
2002 – merger of CWS & CRS
Merger of CIS & Co-operative Bank
to form CFS, also 2002
2002 – the Co-operative Group –
much more integrated and cohesive
commercial organisation
2009 – Somerfields acquisition, CFS
merger with Britannia Building Society
– general revival of fortunes!
2012 - Lloyds-TSB branch acquisitions
The Co-operative
Group’s 1st annual
report

24. HQ of the CWS since
1963 (left); drawings
for new Group HQ,
to open in 2012
The first meeting
of the Co-operative
Commission, 2000
& its report, 2001
Co-operative Group advertising,
2009

25. Renaissance – Why?
‘Falling to the centre’ – concentration
of societies = eventually made the
emergence of unified leadership easier to achieve
Helped by the process of late 20th century retreat &
decline! A growing sense of urgency for change
Changes in leadership – a new generation – the
survival of the co-operative ideal – both in
membership and in a rising generation of managers
Avoided demise as in France, Austria and Germany