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The 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 funeralcare. (It is the UK's biggest funeral operator). However, its most important business by far is grocery retail. With the takeover of rival Somerfield in 2008, it became the UK's fifth largest supermarket group by revenues; although it was eventually overtaken by discounter Aldi, which pushed it back into 6th place during 2016. Market share in the first quarter of 2021 was around 6.2%, only narrowly ahead of 7th-placed Lidl. In 2017, The Co-op announced plans to acquire the wholesale operations of convenience retailer Nisa, and agreed a franchise and wholesale partnership with another smaller rival Costcutter. All businesses now operate under the Co-op name. By the end of 2018, The Co-op managed around 2,582 small and medium-format stores across the country. The group also lends its name to a sizeable community banking business. In 2013, Co-operative Bank signed 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 majority control 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 and Morrisons executive Richard Pennycook, who joined the group that year, was widely credited with saving it from total collapse. He stepped down in 2017, to be succeeded as group CEO as grocery chief Steve Murrells. Jo Whitfield is chief executive, food. The Co-op has around 4.3m active members. Revenues for 2020 were £11.5bn, with net profit of £77m. Food retail accounted for sales of £7.8bn and food wholesale for £1.6bn. The next biggest business was funeralcare with revenues of £272m. The organisation sold its remaining 20% stake in Co-operative Bank in 2018. In 2019, in a reflection of the organisation's strong recovery since 2014, the Co-op was named UK Grocer of the Year for the first time in its history.

Capsule checked 4th May 2021

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Adbrands Daily Update 31st Mar 2020: UK supermarkets are one of the few market sectors enjoying boom trading under lockdown, although there are also significantly higher costs associated with managing staffing and the supply chain. According to latest figures from Kantar Worldpanel, grocery sales during March reached their highest ever level of £10.8bn in just four weeks, with all ten chains enjoying significant year-on-year lifts in till roll ranging from 4.6% at Morrisons to 17.6% at Lidl. As that range suggests, the rate of growth has been very mixed, with discounters Lidl and Aldi enjoying by far the biggest surges. Aldi achieved a new record market share of 8.2% while Lidl was at 6.1%. Market leader Tesco, on the other hand, also enjoyed a significant uplift in till roll and remains more than 10 points ahead of closest rival Sainsbury's, but its share of the market slipped to a new multi-year low of 26.8%. The convenience store sector has also done well out of the shopping surge, with some customers choosing to avoid the longer queues found at big supermarkets. However, these smaller outlets also face a greater risk of staffing shortages if infection rates grow. The Co-op has already closed ten of its 2,500 stores and is considering closure of 60 more. Chief executive Steve Murrells told ThisIsMoney "As lockdown really takes hold, there most definitely will be areas [where we have to close stores]. This could either be due to self-isolation of colleagues, or where customers just aren't using a store. What's critical is that we get replacement labour and help to keep other stores open and keep the country going through this."

Adbrands Weekly Update 12th October 2017: UK food retailer The Co-op has offered to acquire convenience store competitor Nisa for around £143m, or almost £250m including debt. Both chains are owned by their members, but Nisa's board has given its full recommendation to the offer. The chain's 1,400 independent owner-operators will vote on whether to accept the deal next month. Approval would increase Co-op's footprint by around 3,200 outlets. Nisa had previously received an approach from Sainsbury's but this was withdrawn after competition regulators expressed concerns over such a tie-up.

Adbrands Weekly Update 16th Feb 2017: The UK's struggling Co-operative Bank, now only 20% owned by the main Co-op retail group, put itself up for sale in a last-ditch attempt to prevent an enforced liquidation. The bank is close to breaching capital reserves requirements set by the Bank of England as a result of prolonged low interest rates which have slashed its profitability. The bank was recapitalised by institutional shareholders in 2013, but they now face steep losses on their investments.

Adbrands Weekly Update 9th February 2017: After months of neck-and-neck rivalry, Aldi has overtaken The Co-op for the first time to become the UK's 5th largest food retailer. Kantar Worldpanel figures for the 12 weeks to 29th January estimated Aldi's share of till roll at 6.2%, compared to 6.0% for Co-op. It was perhaps unfortunate timing that, later the same day that Kantar's figures were published, Richard Pennycook resigned as CEO of Co-op Group. His departure was not connected to the market share figures, and he will in fact be succeeded by Co-op retail chief Steve Murrells. COO Pippa Wicks moves up to deputy CEO. Pennycook is widely credited with having rescued The Co-op from near-collapse in 2013, as a result of the financial crisis at its banking division.

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.

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