Everybody know the Coop as Britain’s ‘greenest’ supermarket, a purveyor of all things organic and fair-trade. This week they published their annual accounts and recorded a whopping rise in profits of nearly 50% or around £200 million.
I came across at least one comment from the press that this was “proof” that ethical sells. But is it?
Look a little closer at the Coop accounts and you’ll see a rather different picture. First, like for like sales in their stores i.e. the organic vegetables and the fair-trade coffee were flat compared with last year. The grocery end of the business it seems isn’t quite the golden egg that the press release would have you believe it is.
But the extra profit must be coming from somewhere. So where? Well in a word, banking. The Coop’s banking arm last year merged with Britannia Building Society and this has been the primary driver behind the group’s recent success. Profits here are up by 25% largely thanks to the extra profit brought in from Britannia. The Coop model seems to be to pursue more of the same – there are plans to acquire 600 branches from Lloyds Banking Group when they’re sold off later this year.
So from these results at least, it would seem that there is little evidence that ethical does in fact, “sell” any better than anything else. What they do show is that banking is back to being profitable and one of its oldest tricks, mergers and acquisitions, still does a good job of boosting the bottom line.
