Co-op launches franchise pilot with forecourt operator MRH

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The Co-op Group has broken with 170 years of tradition by launching itself into franchising.

It has clinched a deal whereby independent service station operator MRH will pilot seven new franchise Co-op convenience stores.

A decision could be taken by the end of the year whether to roll out the partnership.

Jo Whitfield, Co-op Group retail chief executive said the deal would enable the society to test the franchise model and “potentially pave the way for further expansion to move the Co-op brand and our own-brand food into new communities”.

The first of the seven 1,000-1,500 sq ft stores opens later this month in Eastcote, in the London borough of Hillingdon.

The pilot comes hard on the heels of the Co-op’s trial 25-store tie-up with McColl’s to provide own-brand products.

Whitfield described the franchise route as “an exciting opportunity” to expand the Co-op’s presence further in the convenience sector.

“The trials with MRH and McColl’s demonstrate our commitment to bring award-winning Co-op products to more customers and members around the country.”

MRH chief executive Karen Dickens said she look forward to exploring further ways the service station operator could ensure its customers repeatedly chose MRH for their petrol and convenience needs.

MRH has more than 450 company-owned sites, mostly branded Esso, BP and TORQ. It has strategic partnerships with Spar, Greggs, Subway and Costa Express.

A Co-op Group spokesman said franchising represented a low-cost opportunity to gain space and it had undertaken a lot of work to create standards and guidelines which MRH would adhere to and on which they would be regularly assessed.

The mutual has not created a separate franchise division at this stage.

Readers' comments (9)

  • It is not the first time the Co op Group has run a franchise operation. Around 30 years ago the the CWS ran a franchise operation called Late Late Supershop, At that time Co op stores traded six days a week and closed around 6pm. To avoid issues with USDAW the convenience stores were launched as a separate operation. The stores were relatively successful and included many of the aspects of a C-store we take for granted today.

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  • This won't go down well at all in the cooperative sector, as effectively the Group are giving licenses to non cooperatives to give the false impression they are cooperatives. Now this undermines all our work and given there are tens of thousands of cooperatives around the world, nearly 7000 different coops in Britain alone, I'm not sure the Co-operative Group have the moral authority to act as if they own the word Co-operative.

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  • Will lead to non unionised, zero hour contract operated stores who in no way will reflect the ehos of the cooperative movement.SHAME ON THEM.

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  • Using the word "co-operative" does have issues which is probably one of the reasons the Group has reverted to trading as 'Co-op'. To reach the number of 7000 in Britain Paul must be including worker co-ops as well as consumer co-ops. These are two very different business models. The Co-operative Group, its predecessors and its fellow members of the CRTG who follow the Rochdale system were established as consumer co-ops. The biggest and best known worker or employee co-op is John Lewis who more correctly use the word Partnership. Most other employee co-ops in the U.K. are very small operations. This difficulty of definition has of course been compounded by the recent history of the Co-operative Bank which is certainly no longer a co-operative. Incidentally there is a co-op in the south of England which does franchise stores under the 'Welcome' brand.

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  • Professor, Thanks for the not required social history lesson.Knowledge all good ,THANKS.

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  • As the son and grandson of Co-op grocers I believe that one cannot truly understand the Co-operative Movement without understanding its social history.

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  • History won't help to deal with today's trading issues. Give it a rest Professor(?) Calba(??)

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  • Bored Now.

    Actually learning fromthe mistakes and the successes of the past can in occasion give valuable insight.

    The franchising of the Co-up name to private enterprise will IMO blur the lines of difference and devalue the brand as time goes on into "just another supermarket chain".

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  • This is pilot and I think its good move to reach Co-op products into wider community. As long as MRH and Co-op maintain the equation and standards, then it is a good move. We are moving towards more globalisation and different brands under one roof. I would believe its a good move.

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