A date to remember - 21 December 1844.
That was the day 28 weavers from Rochdale came together to establish the first Rochdale Equitable Pioneers Society and, in doing so, laid the foundations of the co-operative movement
Their idea was simple.
Based on its principles of self-help, self-responsibility, democracy, equality, equity and solidarity, the pioneers opened their first shop on Toad Lane selling pure food at fair prices.
The movement was in response to chronic unemployment, poverty, hunger and social inequality.
For Steve Murrells, the chief executive of The Co-operative Group, the pillars that the Co-op was founded on are more important than ever.
Murrells has been instrumental in the Co-op’s recovery.
Co-op's recovery
He worked closely with former boss Richard Pennycook who led the rescue and rebuild of the Manchester-headquartered mutual, which sells everything from food and coffins to life insurance.
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The group has had a troubled few years when the banking arm of the business nearly collapsed in 2013 and dragged the wider Co-operative group to a £2.5bn annual loss after a £1.5bn hole was discovered in the lender’s balance sheet.
It had to be rescued in a deal as the Co-op ceded control to bondholders, including US hedge funds.
There was further damage to the bank’s reputation and its ethical image took a bashing after a drugs scandal involving former bank chairman Paul Flowers, and sharp criticism about how the Methodist minister was appointed to the role despite a lack of experience.
Under Pennycook, the Co-op sold a number of businesses, including its pharmacy and farming operations.
He left in 2017 handing the baton to Murrells.
Dressed casually in a brown shirt and jeans, Murrells, who doesn’t have an office preferring to sit with colleagues, is looking to a Co-op of the future.
Rochdale pioneers
The group, which employs more than 5,000 people in Greater Manchester and around 70,000 across the 海角视频, is playing a strong role in trying to fix society’s social issues such as homelessness, poverty, poor health, education and crime.
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“What we’ve been able to do in recent years is start to build a modern Co-op, one that is commercially stronger than it had been, but more importantly, one that chimes with things that people care about,” Murrells tells me.
“In the same way those Rochdale pioneers cared about the social injustices at the time, we are doing our version of that and caring about things that appear broken and are broken up and down the country and in communities.”
Last year, the Co-op introduced an ambition statement called, ‘Stronger Co-op, stronger communities.’
The five-year plan wants to see the mutual ‘face into’ community challenges and start to re-connect with the things that people are worried about. Murrells said: “The Co-op is not just a business, it’s the way we do business that is important, and that idea sets us apart from most PLCs and gives us a different conversation in places that only the Co-op can play into.
“I regularly think about the macro-economics of the country.
“It’s a country of division, it’s a country that’s trying to work out how it comes together again.
“At the moment, whether it be north or south, Remain or Leave, 海角视频 PLC is pretty unhealthy and having now rescued the Co-op, and starting to rebuild our performance, we’re enjoying great resilience in our business, especially in food.
“It has given us the confidence in getting our voice back into big social issues.”
The Co-op is the 海角视频’s sixth-biggest grocer, with 6% market share, and the biggest funeral provider. It sells insurance, legal services and electricals.
The business hailed 2018 as a year of community initiatives, as it returned £79m to members and local projects.
While £60m went back to its members, it paid out more than £19m to local causes, with each receiving an average of more than £4,500.
Giving back to the community
Co-op’s pension fund meanwhile is looking into investing £50m in social and affordable housing for the first time.
“If you walk around the city you can see it’s riddled with people sleeping rough. We’ve just taken £50m from our pension fund and we’re building 1,000 social homes.
“The build will start in Scotland and Yorkshire, and like all things we are doing now, it is a good investment and I think there’s every chance we would take it wider.”
The retailer also introduced the 海角视频’s first compostable carrier bags as part of its plan to eradicate hard-to-recycle plastics within five years.
The business is also innovating its home delivery service having introduced electric bikes which will deliver wines, pizza and milk for people living close to a Co-op Food store.
In Milton Keynes it is trialing robot deliveries which could be extended to other areas of the 海角视频.
“We’re trialing a number of e-commerce solutions for the first time which are aligned to being a convenience retailer but thinking about sustainability and the environment,” said Murrells.
The CEO is also keen to put community spaces back into towns and villages after a wellbeing index it carried out revealed that the lack of spaces, which have been massively cut following 15 years of austerity, is a real issue for people.
Its skills and education piece will also see the Co-op expand its academy schools from 23 to 40 within the next two years educating 40,000 children in some of the 海角视频’s most deprived areas.
Making a difference
Murrells said: “We’re getting more confident facing into these issues that we’re hearing and seeing.
“And our numbers show that it’s working - and that gives us confidence to work in other areas such as health.
“Being part of the self-care revolution is something that we think we’ve got some value to add.
“We sold our bricks and mortar pharmacy business during the crisis and here we are, four years later, being able to get back into the health arena starting off with a repeat prescription service based on a capital light digital platform.
“This is a big market that is actually badly serviced and we think we can do a better job.
“It’s the start of where we think we can help the pressure on the frontline of the NHS and start to solve the needs upstream.
“For example we’ve been trialing in a number of our stores in Manchester where customers can go in and get a free BMI and cholesterol check.
"As a consequence of what it tells you, it will then link you into your local GP to try and face into any issues at an earlier stage.
“When we spoke to Manchester Health it was pretty clear that a population of males in the city are not great at coming forward with medical issues.
“They are asking us to find an easy way to capture those issues early on.”
He added: “The belief in here is that if we do the work in the community well, that will then spin the financial performance with the expectation that the more successful, and the more value we create, the more we can put back into local communities.
“That’s what is so different and very exciting about being the CEO of this company because a PLC can’t do this, its institutions wouldn’t allow it to.
“But because the Co-op is owned by 4.5m members that are very energised by these things we get permission to go out and make a big difference in society.”
The financials
And this is paying off financially too.
The Co-operative Group’s sales soared last year as its acquisition of Nisa convenience stores paid off.
Total revenues jumped 14% to £10.2bn in the 52 weeks to January 5, driven by the addition of Nisa and a strong performance in the food business.
Like-for-like food sales were up 4.4%, marking the fifth consecutive year of growth.
Profit before tax from continuing operations was up 27% to £93m.
Underlying pre-tax profits were flat at £43m.
It follows Co-op’s acquisition in 2017 of convenience store network Nisa, which formally completed in May of last year and has seen
Murrells said: “We’ve reset the food business and moved from a supermarket into convenience which has seen more people coming our way. The quality of our food is exceptional, our prices are fair and our shops are being recognised as a great place to go and shop.”
In the same way Co-op Food has been transformed, so has the funeral and insurance business.
The funeral sector is changing faster than the digital business, says Murrells.
For too long funerals have been expensive and as the market leader, Co-op Funeralcare is looking at the needs of people and what they want is an affordable service.
“That’s putting some tension into our model but that’s good tension because it’s doing the right thing,” said Murrells. “And if we are seen to be doing the right thing, then over time, more people will travel our way and we will do more funerals.
“In our insurance business we are looking at products that will also make a difference. We’ve said our future would be much better if we focused on unique products such as our life product that we launched with Royal London.
“This gives customers two honeymoon periods if they find themselves in tough times. The travel product which we launched 18 months ago takes into account core medical conditions such as cancer.”
He added: “As we have become more confident again, as we recover our mojo and our voice, our core businesses are growing and allowing us to look at what people really care about. Because everybody is paralysed by Brexit, those issues are not on the agenda. Many people can’t believe we are doing the things that we are.
“If we work hard in that space then people not only will have an emotional connection with the Co-op, which is why I joined back in 2012, but they’ll see that when they buy our products and services, they get a great deal.
“This allows us to create the good that goes back into their local community.”
Finally, I ask Murrells if he is proud of the business that exists today? “Without a doubt but it’s not over yet.”
Murrels on Manchester
Steve Murrells joined the Co-op as CEO of its food business in 2012 having spent more than 30 years in food retail. He was appointed to group CEO in March 2017.
He said: “Someone came and spoke to me about moving to the Co-op and the more I heard and researched I felt myself caught on a fish hook and being pulled in because what was obvious to me back then, and is still the truth today, is that there is a real emotional connection to the brand still.
“Aside from the fact that a year after I arrived we had a crisis in the bank, people told me that if you could start getting things right, there was a chance to rebuild something very special, make it more relevant and help make a difference for communities and its customers.
“It was a job I thought I couldn’t turn down and I have been lucky enough to turn the food business around and then took on the group job two years ago.”
Adding: “The biggest buzz is seeing great people do great things.”
Speaking about Manchester, he said: “I love it here, this city is bouncing.
“Each morning I can see the city’s skyline transform.
“I think it took a terrible moment for Manchester people to rebuild Manchester and the city has done a great job.
“It’s exciting, everybody is coming this way which is great.”
He added: “What we need to make sure is that Greater Manchester thrives in the same way as central Manchester does.
“We need to make sure we raise living standards, make sure access to homes is better than it has ever been, and improve the health of our communities.”
Murrells on diversity and inclusion
Inclusiveness and diversity is a top priority for the Co-operative Group.
Its leadership and transformation team is split 50/50 in terms of gender diversity and the group executive board
has two men and five women.
In 2017 Jo Whitfield was appointed the chief executive of Co-op Food and became the first female boss of a retail business of such a large scale.
“We’re seeing throughout the Co-op more store managers that are women, more funeral directors that are women and certainly in this building we are seeing more and more leadership jobs going to women,” said Steve Murrells, CEO of the Co-operative Group.
“That’s been evolving over time and because of the transformation work we have done and what we are doing, the brand is resonating again and that attracts the best talent and some great women are joining the organisation but also coming through the business.”
Diversity doesn’t stop at gender equality and Murrells wants the organisation to reflect all of society.
“Inclusion and diversity in this organisation is a really rich thing to have.
“We want people of all backgrounds, religions, sexual orientation to join us and enjoy a career here at The Co-op.”