Co-op - it returned to its old name in 2016 after several years as The Co-operative Group - is the UK's biggest mutual retail association, offering a broad range of services including travel, legal services and even funeral services. It is the UK #1 in that sector. However, its biggest business is grocery retail. With the takeover of rival Somerfield in 2008, it became the UK's fifth largest supermarket group by revenues, with around 6% of UK grocery shopping, according to Kantar Worldpanel. But it's the #2 behind Tesco by outlets with around 2,800 small and medium-format stores across the country. All businesses now operate under the Co-op name. The group's banking business was expected to expand dramatically in 2013 following a deal to acquire 630 branches and 5m customers from Lloyds. However, completion was delayed repeatedly by funding problems and the deal eventually collapsed. Shortly afterwards, the bank's credit rating was slashed as a result of a gaping capital shortfall prompted by bad debts, mostly inherited through the acquisition of building society Britannia. To refinance the bank and avoid collapse, the Co-op was obliged to transfer ownership of that business to its bondholders. Further sordid revelations followed concerning the off-duty activities of former bank chairman Paul Flowers. The disastrous performance of the banking division, as well as a sharp downturn in trading at its grocery business, resulted in a massive £2.5bn loss in 2013. In 2014, the group sold its pharmacy and farming divisions to reduce debt. Revenues for 2015 were £9.3bn, including £7.0bn from food retail. Funeralcare is the next biggest at £399m. The Co-op has around 5m members. Euan Sutherland resigned as group chief executive in Mar 2014, and was replaced by Richard Pennycook. Steve Murrells is CEO, food retail; Niall Booker is CEO, Co-operative Bank. Adbrands does not currently profile this company but subscribers may access account assignments and contact information. The searchable account assignments database is available to full subscribers to Adbrands.net premium services. Click here to access Adbrands account assignments (subscribers only); or see here for information on how to subscribe.
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Capsule checked 9th April 2015
Recent stories from Adbrands Weekly Update:
Adbrands Weekly Update 24th Mar 2016: Latest figures from Kantar Worldpanel for market share among UK supermarkets put Aldi at a new high, close to overtaking Co-operative Food Stores as the local #5. Aldi's share for the 12 weeks to the end of Feb hit 5.8%, compared to 6.0% for the Co-op. Sainsbury's retained the #2 position for the fourth consecutive period, ahead of Asda.
Adbrands Weekly Update 3rd Dec 2015: Ads of the Week: "Ice". Leo Burnett London joins in the seasonal fun with what may be their swansong for Co-Op Food Stores - the account is under review. This excellent but low-key ad fully embraces the chain's down-home community roots. Once again, UK oldies are on the receiving end of some Yuletide munificence. It's a commendable concept, executed without sentimentality (and that's a big relief at this otherwise heartstring-twanging time of year).
Adbrands Weekly Update 9th Apr 2015: Aldi has overtaken Waitrose to become the UK's 6th largest grocery retailer for the first time, according to latest figures from Kantar Worldpanel. The Co-op remained the 5th largest grocer at 6.0%, but is now clearly in Aldi's sights as the next obstacle to overcome. Separately, The Co-operative Group reported a return to profit for 2014 after the previous year's near-meltdown and £2.3bn loss. Group revenues dipped 3% to £9.4bn, including £7.09bn from food retailing. Net profit rebounded to £216m, largely as a result of gains from the sale of its pharmacy and farming divisions.
Adbrands Weekly Update 5th Dec 2014: Ads of the Week: "Christmas Shopping". Not long to go now till the big day, and here's a fine late arrival in the Christmas marketing wars, from Leo Burnett London for Co-operative Food's UK convenience stores. No need for a big budget, all-singing all-dancing spectacular, just a reminder of that universal human truth - the sudden flash of memory of the one item you forgot to buy, that always comes at the most inopportune moment. Nicely done.
Adbrands Weekly Update 24th July 2014: Troubled UK retailer The Co-operative Group agreed to sell its pharmacy business, the country's third largest after Boots and Superdrug, to cash and carry wholesaler Bestway for £620m. It will use the proceeds to pay down debt and refinance its remaining supermarket and funeralcare businesses. The estate comprises 780 stores with combined sales of £760m.
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