Co-op businesses are better placed to weather the post lockdown economic storm, according to a new study.
The annual Co-op Economy report reveals that co-ops have almost double the chance of surviving the first five years when compared to other start-up businesses. Compiled by sector body Co-operatives UK, the report shows that 76% of co-ops (up from 72%in 2019) are still operating after the difficult first five years of existence. Just 42% of all new companies make it beyond five years.
Co-ops are organisations owned and controlled by their members. The study suggests that their collective decision making and more rounded approach, as opposed to just fixating on maximising profits, will give co-ops a distinct advantage as the UK economy recovers from the coronavirus pandemic.
The UK’s 7,063 co-ops operate across all sectors, from community-owned pubs to multi-billion pound high street retailers and professional services providers, from the nation’s biggest farmer-owned agriculture businesses to supporter-owned football clubs. They have a combined turnover of £38.2bn (up £500m from 2019) and 14 million people are members of a co-op.
The largest co-op is the Co-operative Group with a turnover of £10.9bn followed by the John Lewis Partnership (turnover £10.2bn) and the farmer-owned Arla Foods (£2.6bn).
Steve Murrells, CEO of the Co-op Group, said: “Co-op’s already play an important role in the social and economic fabric of our country, and the Co-op Economy report illustrates that they are well placed to face into the difficult economic conditions that lie ahead in the post lockdown world.
“Co-ops are in existence to create value for their members and their communities and are not just about maximising profits for shareholders. All businesses now face unprecedented challenges, but the fact that many co-ops have community-based ownership means more people are invested in their long-term success.”
Nick Matthews, chair of Co-operatives UK, added: “There’s an appetite for a different economy to emerge from this crisis, with many people talking about the need to ‘build back better’. If we are to rebuild a fairer economy, provide decent livelihoods and support communities we need more co-ops, mutuals and social enterprises, not less. And there’s compelling evidence to show that new co-ops are built to last.”
NAM Implications:
- Collective decision making can be slower, resulting in some missed opportunities…
- …but collective interest and shared responsibilities…
- …have to benefit overall.
