Community Owned Shops: The modern co-operative pioneers

3^rd April 2013

Peter Couchman, Chief Executive of the Plunkett Foundation, contributes to ResPublica's Making It Mutual collection

The General Election in 2010 saw a major landmark in the development of the Co-operative Movement. For the first time ever, the three largest political parties all made glowing reference to the role of co-operatives in British society and how they would support them if elected. It marked a major breakthrough both in terms recognition and in terms of cross-party support.

Yet, behind this, was an even more important learning point for co-operatives, for not all co-operatives were recognised equally. Only three forms of co-operatives appeared in all three parties’ election materials. These were community-owned village shops, co-operative pubs and co-operative football clubs.
The choice is no accident. These very diverse forms of enterprise share three important attributes. Firstly, they involve saving something that people care deeply about. Further, they care so deeply about it that they are willing to take action themselves to save them. Thirdly, in each case there is a ready-made co-operative way for people to come together which has been tested by ordinary people like themselves.

So the message is clear that, in this modern age, co-operatives are at their strongest when they are solving the problems of ordinary people.

The history of the community shop movement

The emergence of this modern Co-operative Movement has much in common with the emergence of co-operatives in the Nineteenth Century. They tend to start small, drawing on local support in terms trading loyalty, investment and time.

The modern village shop movement can been seen as emerging in England in the early 1990s. Although there had been a number of individual shops before then, including a few survivors from Victorian times, it was at this point that a momentum was built up where each new shop encouraged another community to try. In Scotland, a similar process has started some ten years before, aided by the Co-operative Group, to meet the needs of Scottish islands and remote communities.

The early pioneers started small and relied heavily on volunteer labour. They also had a strong tradition of mutual help and soon formed an organisation to help new starts, called The Village Retail Shop Association (ViRSA). It merged with the Plunkett Foundation in 2005 to create the modern support service for community-owned shops and other community-owned enterprises.

Community shops today

Today, these co-operatives have become the dominant way for a rural community to save a shop in danger of closure. Three hundred are operating today with even more in the pipeline.

In challenging economic times, it is an incredibly sustainable model with only 13 projects failing in those twenty years, far more resilient than just about any other form of enterprise. [1] No store closed in 2012 despite the state of the economy.

The commitment of these 300 communities as co-operative members far outstrips those of the more traditional co-operatives. They not only trade with their co-operative, they invest their own money to create it, often using community shares as their main form of investment. Also, in many cases the shop will be reliant on volunteering. Across the UK, 1.2 million hours of volunteering goes into community shops (compared to one million hours donated to the RSPB).
Often operating out of small premises, many without previous retail experience and running shops which the private sector failed to run, they are showing just what co-operation can do. Last year, their like-with-like sales growth of 9.6% outstripped every major retailer in the UK. Their growth rate of over 8% also beat all bar one the major retailers. [2]

Another major economic impact is their connection to the local food economy with 97% of shops having a commitment to local food. It accounts for 26% of sales, compared to less than 1% of supermarket sales. This gives new local food enterprises a chance to develop. One village reported that four new food enterprises had been created in the village within a year of the shop opening.

Their impact is not restricted to the economic. On average, 24% of their profits were used for community use. In terms of environmental impact, if each member of a community shop shopped once a year at the shop instead of travelling to the nearest supermarket, then the movement would save 4 million miles of travel.

The secret of community shops lies in the fact that they do not seek commercial success for its own sake. Their passion is to provide a service for their whole community in a shop owned by their community. They are often formed by the fear of what will happen to their community if the shop is lost.

Perhaps the greatest sign that they had become the accepted way for rural communities to tackle their loss of shops came when five million people listened each week in 2010 to the residents of Ambridge saving their village shop by forming a co-operative on The Archers, Britain’s longest running soap opera.

This form of retailing doesn’t take a lack of traditional land for development as a barrier. Lodsworth in Sussex pays 1p rent a year to site its beautiful wooden store in the pub car park. Lanreath in Cornwall developed its successful store from the village toilet (bringing a whole new meaning to “convenience store”). Whilst Exbourne, denied the chance to build up, built down and created an underground store.

The role of the volunteer varies in each store. Some only have paid staff, whereas others have only volunteers. Most have a mix and there is no right or wrong combination, only what works for each community. To sit with volunteers and listen to why they give up their time is an education. Most will talk of how they value their community and what to save its basic fabric. Yet, soon the conversation will also turn to their own lives and they will start to talk of how volunteering has given them a new role. Some will talk of it being a lifeline after the loss of a partner, the loss of a job or a major health event. There is a complexity to volunteering that is lost to any who see it simply as a way of keeping the door open.

In recent times, the ambition of most shops has grown. Many have become sophisticated enterprises able to compete with mainstream supermarkets by positioning themselves as the hub of the community and local supplier networks. One report last year showed that they were far better at surviving shocks to system, such as bad weather, than their mainstream competitors. [3]

They have also come together to form the Plunkett Community Shop Network, which enables them to buy electricity, insurance, telecommunications, credit card services and till systems together. They also have attracted the support of traditional co-operatives, such as Co-operative Group which allows them to source electricity through its buying power and supports new entrants through its Co-operative Enterprise Hub. Others, such as the Midcounties Co-op, allow food purchasing designed for smaller store.

If shops are the flagships of this rural revolution, they are certainly not the only member of the fleet. In essence, there would appear to be no aspect of rural life which doesn’t lend itself to a co-operative solution. The loss of village pubs has led to an increasing number of villages choosing to own their own local, with 11 new co-operative pubs in the last two years and more in the pipeline. In the volatile world of pub ownership, not one has failed so far. [4]

The pioneer of this approach, the Old Crown in Hesket Newmarket, Cumbria, has co-operatives running both the local pub and the brewery. The pub has even reinvented the co-operative dividend by paying its shareholders their dividend in beer. Across the border in Yorkshire, the George & Dragon in Hudswell has gone from saving the pub to also running the village shop, library and allotments.

The number of Co-operative Pubs remains small, but rising. It is also proving to be a model which can be used in urban settings as well as rural. The nature of how they are run is different from shops. They require more capital to start and tend not to use volunteers. The standard model sees the co-operative owning the pub, deciding what type of pub it should be, then appointing a tenant to run it for them.

The rethinking of traditional uses of rural buildings has gone as far as challenging the assumption that the church is a building used for two hours on a Sunday. Yarpole in Herefordshire created its village shop and café in their church, whilst Shipbourne in Kent holds its farmers’ market between the pews.

Even farming, for so long a bastion of individual ownership, flourishes with this co-operative approach. Fordhall Farm in Shropshire was saved when 8,000 people came forward to buy it, leaving tenant farmers Ben Hollins to run the enterprise for the benefit of the whole community.

But the services don’t have to be traditional ones. Alston in Cumbria is home to Cybermoor, a co-operative broadband service. It is even experimenting with a new service where pilotless drones are used to save shepherds having to go up onto the fells in bad weather.

Opportunities for the future

There may be a limit to what these forms of co-operative enterprises can tackle, but it isn’t clear where that lies at present. The Big Lottery Fund created Village SOS to offer help to communities taking this approach. In one year, over 1,400 communities came forward with a broad range of ideas on how to apply this approach to meeting their needs.

The Plunkett Foundation, founded by Sir Horace Plunkett, the pioneer of Irish agricultural co-operation, has found that his Nineteenth Century ways are precisely what is needed in the modern world. Sir Horace would ride into a village, sit down and listen to the needs of the villagers and then convince them that some of those needs could be met through co-operative enterprise. Today, the tools have changed, but the need to inspire people that they too can take co-operative action is as real as ever.

The lesson for both politicians and the Co-operative Movement is a simple one. When a community has an issue that matters so much to them that the thought of failure is too much to bear, then forming a co-operative is often the solution. It is an answer for today, a modern incarnation of the self-help tradition.
In a world filled with problems created by short-term thinking, these modern day co-operative pioneers think differently. As one pub shareholder put it to me, “Buying a share in the pub meant we didn’t have a holiday that year. But we saved the pub not just for us, but also for our children and probably their children as well”.

This article was originally published in ResPublica’s Making it Mutual: The ownership revolution that Britain needs, a collection of essays covering all areas of policy – energy, financial services, education, infrastructure, welfare, public services, competition – proposing entrepreneurial and innovative policy proposals for structural reform.