The United Kingdom is home to a widespread and diverse co-operative movement, with over 7,000 registered co-operatives owned by 17 million individual members and which contribute £34bn a year to the British economy. Modern co-operation started with the Rochdale Pioneers' shop in the northern English town of Rochdale in 1844, though the history of co-operation in Britain can be traced back to before 1800. The British co-operative movement is most commonly associated with The Co-operative brand (best known for its supermarket and Funeralcare brands) which has been adopted by several large consumers' co-operative societies; however, there are many thousands of registered co-operative businesses operating in the UK. Alongside these consumers' co-operatives, there exist many prominent agricultural co-operatives (621), co-operative housing providers (619), health and social care cooperatives (111), cooperative schools (834), retail co-operatives, co-operatively run community energy projects, football supporters' trusts, credit unions, and worker-owned businesses.
Co-operatives UK is the central membership organisation for co-operative enterprise throughout the UK. This is a co-operative of co-operatives: a co-operative federation. Most kinds of co-operatives are eligible to join Co-operatives UK.
Origins of the British co-operative movement Though the history of the co-operative movement in the UK is often traced back to the Rochdale Pioneers of 1844, the history of co-operation can be traced back much further. The origins of modern co-operatives owe their beginnings not simply to the extreme poverty faced by many in the 18th and 19th centuries, but also to the rapid social changes of urbanisation, the rising food prices which resulted from the marketisation of the economy and from the lack of political representation for the working class during this period. These factors led to a number of social changes including an increased focus on mutual businesses (notably co-operatives) in public discourse during this time and also to events such as the Swing Riots of 1830.Wilson, J. F., Webster, A. and Vorberg-Rugh, R. (2013) "Building Co-operation: A business history of The Co-operative Group", Oxford University Press, Oxford Early co-ops often focused on the provision of essential services (notably food) to members where the market was either unable to provide these services sufficiently or was considered unjust. Often the more successful co-ops were established around the trades which were experiencing the largest impact from the rapid industrialisation such as mining and weaving. This was likely due to the clearer direct benefits of membership and the solidarity of workers with a similar plight. The provision of food was a highly successful area for co-ops with many becoming involved in milling and baking bread. The Hull Anti-Mill Co-op, established in 1795 and which traded for a century, provides an example of such a successful society.
Rochdale Society of Equitable Pioneers
Though many co-operative societies had been established by the 1840s, many had not been successful with societies often suffering through financial maladministration or fraud, owing to the very limited legislation surrounding such enterprises. During the boom times, when work in the factories was more fruitful, co-operative societies also had difficulty encouraging people to retain their membership owing to perception of its limited financial benefits. It became understood that some kind of economic benefit for membership was required alongside the educational and social benefits. It was the implementation of the patronage dividend and the formalisation of the Rochdale Principles which led to the success of the Rochdale Society of Equitable Pioneers which was established in December 1844, a business which continues to this day as a part of The Co-operative Group. The Rochdale Pioneers society became highly successful with 1,400 members in 1855 and the co-op expanded further, after opening additional stores, to have 5,560 members by 1870. This success encouraged a boom in co-operatives in the following decades across the UK, but predominately across the industrial heartlands of northern England.
By 1860 there were more than 200 co-ops in the north west of England which were running in a similar manner to the Rochdale society. Private shopkeepers became resentful of the competition which they were experiencing from these new co-operative stores, often as they saw the dividend as an unfair competitive advantage, and so some powerful shopkeepers lobbied for wholesalers to stop supplying these new co-operative societies. Though few such boycotts actually occurred, this threat worried many people in the co-operative movement and so they endeavoured to create a co-operative wholesaler to supply at least some key products to co-operative stores. The Industrial and Provident Societies Act 1862 enabled co-operative societies to invest in other co-operative societies, in effect permitting co-operative federations. Following this the North of England Co-operative Wholesale Industrial and Provident Society Limited, later renamed the Co-operative Wholesale Society (CWS) was launched in Manchester by 300 individual co-operatives in Yorkshire and Lancashire during 1863. The Scottish Co-operative Wholesale Society was founded in 1868.
Consumers' co-operatives (retail and food)
The largest and most recognised part of the UK movement are the many consumers' co-operatives. They are co-operative businesses run for the benefit of their customer members. Of these co-operatives, the largest sector is food retailing, though they have a significant presence in other sectors such as travel agencies and funeral directors. The late 20th and early 21st centuries have seen a gradual exit by these businesses from the non-food retailing market.
Many co-operatives (by convention known as co-operative societies) started out in a single village, town or city usually with just a single store. Here, members would be customers of the society's trading location and the society would reward these members with a proportion of any profits based on that member's spending with the society, or a dividend. This is a fundamental difference between a co-operative and a joint stock company. Most societies were small, and by 1900, there were 1,439 co-operatives covering virtually every area of the UK. Gradually, many societies expanded by opening further stores or by merging with a neighbouring society. Today, there is one dominant, national society, The Co-operative Group, and a number of large regional co-operative societies such as Central England Co-operative, the Midcounties Co-operative and Scotmid. Many of these large co-operative societies have businesses in a number of sectors, are led by their values principles and owned by their members. Membership is open to everyone and alongside being democratically involved in the decision making of the societies, every year members receive a share of the profits based on the amount made in profits that year and the how much they had spent with any of its businesses. In the case of The Co-operative Group, the society has over four million members and 3,600 trading outlets for its family of business which comprises groceries, insurance reselling, funerals, funeral plans, legal services and loans. In contrast to these large regional or national societies, some have remained with a single store such as Shepley Co-op, Grosmont Co-op, Coniston Co-op and Allendale Co-op.
The decline, through mergers, of single shop co-operatives, was reversed by two trends. Firstly, around 170 community owned shops were established since 1979, many of which are co-operatives. Secondly, the United States food co-operative movement was replicated in the UK: some of the independent food co-operatives established in the late 20th and early 21st centuries operate shops.
History of the British consumer co-operative movement
By 1860 there were more than 200 co-ops in the north west of England which were running in a similar manner to the Rochdale society. Private shopkeepers became resentful of the competition which they were experiencing from these new co-operative stores, often as they saw the dividend as an unfair competitive advantage, and so some powerful shopkeepers lobbied for wholesalers to stop supplying these new co-operative societies. Though few such boycotts actually occurred, this threat worried many people in the co-operative movement and so they endeavoured to create a co-operative wholesaler to supply at least some key products to co-operative stores. The North of England Co-operative Wholesale Industrial and Provident Society Limited, later renamed the Co-operative Wholesale Society (CWS) was launched in Manchester by 300 individual co-operatives in Yorkshire and Lancashire during 1863. The Scottish Co-operative Wholesale Society was founded in 1868. The CWS grew rapidly and supplied produce to co-operative stores across England, competing fiercely for trade from co-operative societies with other non-co-operative wholesalers which led to the CWS becoming highly innovative. By 1890 the CWS had established significant branches in Leeds, Blackburn, Bristol, Nottingham and Huddersfield alongside a number of factories which produced biscuits (Manchester), Boots (Leicester), Soap (Durham) and textiles (Batley). This rapid expansion continued so that by the outbreak of World War I the CWS had major offices in the United States, Denmark, Australia and a tea plantation in India.
Many, fiercely local, societies saw the CWS as a valuable supplier but did not want to exclusively purchase produce from a single source. In order to increase loyalty to the CWS, they started to assist the local retail societies in more ways than simply as a wholesaler. The CWS Bank, the precursor to The Co-operative Bank, financed loans for societies to use for expansion through purchasing new buildings, land or new equipment. After the acquisition of the Co-operative Insurance Society in 1913, the CWS also provided insurance services to members and the CWS also began providing legal services – all business which remain today. It was hoped that these financial ties, as well as the CWS corporate dividend, would increase loyalty to the CWS. During World War II rationing led to an effective pause in any major changes to the co-operative movement in the UK with the CWS becoming highly involved in sourcing overseas goods for UK consumers and manufacturing wartime goods. Following the war there was some attempt to modernise the co-operative stores. After the London Co-operative Society opened its first self-service shop in 1942 the co-operative movement led the way on the development of self-service stores to the point where, by the 1950s, 90% of self-service shops in the UK were run by co-operatives. Despite this the market share and the number of members of the society began to dwindle and - importantly - so did the member share capital which societies used to invest. The CWS responded with an operational facelift in 1968 which introduced the first national co-operative branding, the 'Co-op' cloverleaf. Though this led to some improvements the movement (including the CWS) remained largely unreformed with its grocery market share continuing its downward trend. It was also suggested around this time that societies merge to form regional societies to improve their competitiveness through the economies of scale. Many local co-op societies strongly resisted such mergers but, as their financial situation declined, many were forced to merge to create regional societies or with either the CRS or the SCWS to avoid failing. Consolidation within the movement was considerable and in 1973 serious financial mismanagement of the SCWS Bank led to the SCWS and the CWS merging to form a single UK-wide wholesale society.