Beleaguered consumer group Co-Op has been predicted this week to announce its worst losses in history this March. This signals rock bottom in the downfall of the consumer group but can it rebound from its nightmare year?
Co-op had a catastrophic year. Hit by scandal at every turn, the company was never far from the tabloid headlines and saw shares plummet on an almost daily basis. Consumer confidence in the cooperative has vanished and it led to such dire straits their banking branch had to be bailed out.
So it’s no surprise that experts in the industry expect the consumer cooperative to announce the worse losses in its extensive history on 26th March. Experts predict that company bosses will announce losses totalling at least £2 billion.
The losses look set to be extensive. Most in the industry expect most of the losses to come from its banking, which was forced into such dire straits in 2013 that it was forced to seek government help, an action not seen in the banking industry since the financial crash back in 2008.
Furthermore it is expected to announce the sale of its pharmacy chain. The chain, comprising 750 premises, generated revenues of £764 million in 2012.This comes off already stark figures from the first half of 2013 which revealed that the cooperative generated a pre-tax loss of £559 million.
However a recovery plan is in the making. Full details of the plan are not set to be announced until its annual meeting has taken place; this is slated for 17th May. However it is expected that the company will take some drastic measures in order to ensure its survival. These include an expected 4,000-5,000 layoffs by 2017.
However some are worried that such measures would divert the company away from its ethical roots. A member of the cooperative has been recorded by new sources as saying that “they worry that the board is exaggerating the scale of the crisis, including losses, to turn the Co-op into much more of a conventional business, and move it away from its democratic and ethical roots.”
The nature of collective ownership makes Co-Op a unique case, however at RTA Business we see generally principles that apply in business. The Co-Op is in the middle of a crisis it is going to have to change. If it doesn’t it won’t survive.
In business sales change is something you must embrace if you want to succeed. A potential buyer will never be interested in a company that has fallen behind the times.