The Co-operative Group will embark on the latest stage in its turnaround plan by rolling out a new phase of its loyalty scheme intended to revitalise its relationship with its owner members.
Its management team – led by group chief executive Richard Pennycook – is aiming to encourage its 5 million members to become more engaged with the business, which plunged to a £2.5bn loss in 2013 as a result of a scandal in its banking arm that also raised questions about the way the rest of business operated.
The members of the mutual – which now focuses on groceries and funeral homes with some remaining financial services operations – will start to receive new membership cards today. This will bring the loyalty programme – under which members receive a 5% reward every time they buy a Co-op own-brand product or service with another 1% for local charities – online.
The mutual, owned by its customer-members and independent societies, has been slower than its plc rivals to offer a loyalty scheme while it has focused on turning around its losses. The crisis in its finances also raised questions about the purpose and role of the individual members who pay £1 to join.
Its insurance customers will not be able to join the loyalty scheme until next year and the Co-op calculates that a member who spends £20 a week on groceries would receive £52 of benefits and generate £10.40 for local charities in a year.
The unveiling of the membership cards follows the rebranding of the Co-op in May when it started to tear down the green facades on its stores and replace with them with the more traditional blue cloverleaf-like design.
Allan Leighton, a former boss of the supermarket chain Asda who now chairs the Co-op, said the loyalty scheme was intended to make membership more meaningful. “A new Co-op economy starts today, which aligns perfectly with our purpose of championing a better way of doing business,” said Leighton.
The Co-op will publish its results on Friday after data released by Kantar earlier this week showed that its grocery sales have outperformed the market, taking its share to 6.6%. This makes Co-op the fifth largest grocer, just ahead of discounters Aldi and Lidl as well as Waitrose.
