Co-operative businesses contribute 34 billion to UK economy

07 June 2016 Consultancy.uk

The co-operative sector in the UK has seen strong growth in the UK in recent years, growing from 15.3 million members in 2012 to an estimated 17.5 million members this year. The upsurge in members stems from the rise in the number of people joining high street retailers and credit unions and the rise in the number of new community-owned organisations across the country.

From the outside a co-operative might look like any other business. It is however the way with which they are run that makes them different. Co-operatives are businesses that are owned and run by members of a co-operative – customers, employees, suppliers or local residents – that have an equal say in what it does and decide how its profits are shared. Co-operatives work in all parts of the economy, from healthcare to housing, farms to football clubs, and retail to agriculture.

A new study by Co-operatives UK, a network for Britain’s nearly 7,000 independent co-operative businesses, shows that the sector has seen an upsurge in popularity. Over the past five years, the number of co-op members increased by 2.3 million to 17.5 million, equivalent to a third of the entire UK adult population. Despite a slight dip on the previous year, the sector as a whole turned over £34 billion last year, generated by a workforce of over 222,000 employees.

Co-operative sector in the UK

“The last five years have been tough for the economy as a whole, yet we have seen strong performance from the co-operative sector. Despite deeply competitive markets the sector as a whole has remained stable,” comments Ed Mayo, Secretary General of Co-operatives UK. He adds “Alongside this solid commercial performance, there has been a surge in the number of people who own and control the UK’s co-operatives. With 17.5 million members owning everything from high street retailers to credit unions, the co-operative sector is the largest open membership organisation in the UK.”

Customer owned retail businesses constitute the single largest part of the UK’s co-operative sector. With 16 million member owners, a turnover last year of nearly £14 billion and a presence on high streets across the UK, they are the most prominent part of the co-operative sector. “A combination of government support for community rights and a growing body of financial assistance and business support means that more and more communities are taking charge, whether it’s assets like community buildings to services like libraries,” reflects Mayo. Worker owned co-operatives add £10.5 billion in turnover. The fastest growth is noted in community owned co-operatives, which has seen the number of co-ops rocket from 21,000 to 46,000, and the amount invested in these co-ops rise from £12.2 million to £142.7 million.

Co-operative businesses in the UK

Regional breakdown
More than three quarters of co-operative businesses in the UK are based in England, with Scotland the second largest co-op market. Wales has 464 co-ops, according to the authors, and Northern Ireland follows with 255 enterprises that work along the lines of joint ownership and a democratic governance.

Retail and agriculture are the most important sectors of the co-operative market. John Lewis is UK’s largest co-operative enterprise with a turnover of £9.8 billion, followed by the Co-op, which has a total income of £9.3 billion. The top five is closed National Merchant Buying Society, Arla Foods and The Midcounties Co-operative. Other organisations in the list of the top 10 co-ops are Central England Co-operative, Openfield Group, United Merchants, Fane Valley Co-operative and First Milk.

Top 10 co-operative businesses in the UK

Looking ahead, the researchers find that the sector is set to enjoy growing popularity, on the back of changing demands from consumers and professionals, as well as the increasing interest in more decentralised, and flexible forms of business ownership. The sector will in particular benefit further from recent Co-op announcement to add 1 million new members over the next 5 years. Last week the Co-op announced plans to return £100 million to its members and their communities a year by 2018, as well as recruiting a further 1 million members into the market.

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