In some ways, Co-operative Group chief executive Peter Marks fits the mould of a senior executive at the Co-op. He is in his late fifties, grey haired and is a Co-op lifer, having started as a trainee manager at Yorkshire Co-operatives’ food division in 1967.
But, in many other ways, Marks does not fit the stereotypical boss of an organisation that used to have a reputation for being the retail equivalent of the civil service. He is outspoken about the challenges facing the Co-op movement, plays racquet ball and drums in a band – Last Orders – which bashes out cover songs from bands and artists of the late 1960s and early 1970s, such as The Rolling Stones and Chuck Berry.
“It’s my version of a mid-life crisis. You can either take up with a young blonde, buy a sports car or a Harley Davidson or join a band. For me, it was the safest and least expensive option,” he says.
He also has the biggest job in the Co-operative Group’s history, following its merger with United Co-operatives in July to create the world’s largest consumer Co-op society. It has a turnover of£9.4 billion, 4.5 million members and 87,500 employees.
Marks says that the merger was “absolutely essential” to the survival of the Co-operative movement and that, until 2006, it had lost its way. When he joined the organisation in 1967 it was the “Tesco of the food market” with a 30 per cent-plus market share, but today it has less than 5 per cent.
He is candid about where the retailer has gone wrong. “For many years, the movement has been a fragmented, loosely knit organisation with multiple boards of directors and chief executives, substantial unnecessary overheads and confused brand interpretation,” he says.
While there have been many smaller mergers between Co-ops over the past 30 years – Marks has been involved in about 10 – it is only this summer’s blockbuster merger that has given it the scale it so badly needed.
Co-operative mass
“We now have 85 per cent of the movement’s trade in one organisation and, for me, it’s job done. The 80:20 principle kicks in, we have got critical mass and we can now present ourselves as a coherent business that has uniform standards across the piece.”
Marks believes that the remaining Co-ops – which use the same centralised buying group – will merge with the Co-op Group eventually. He says that many elements of the integration with United Co-operatives were put in place before the merger was completed in July. “We have seen mergers going wrong recently and we were very focused on our ability to do a lot of groundwork before the merger date. For instance, I put my top team in place before the date so we were able to hit the ground running,” says Marks.
“What is important now is to move the perception of the public with regard to our brand and, to do that, we need to invest significantly,” says Marks. Over the next 12 months, Co-op Group will refit and rebrand more than 1,500 outlets and all 4,200 will be refitted by the end of 2009. Next year, it is rebranding 700 food stores.
Marks says: “It is one of the biggest rebranding exercises in retail history, never mind the Co-operative history. It is a massive task and, of course, it is a big investment for us.” By the end of 2009, it will have invested about£500 million in the refitting and rebranding its businesses to The Co-operative fascia and point-of-sale material.
Another key area of the integration will be IT. Co-operative Group has two IT systems for every function, so it will have to make a decision about which ones to keep and which to jettison.
The Co-operative Group is gunning to deliver cost savings of£50 million a year from the merger. Overall, Marks’ remit is to increase the top and bottom line of all its businesses. Certainly, the Co-operative Group has rapid expansion plans for its pharmacy business. This month, the group unveiled the acquisition of 51 pharmacies from PCT Healthcare, bringing its total to 779 pharmacies. “We see pharmacy as a growth market. We are all living longer and we all need pills and potions to keep us well,” he says.
After five months at the helm, Marks says: “The big positive is that, when companies integrate, sometimes management take their eye off the ball and you find that performance suffers. That is clearly not happening here and will not be allowed to happen. Business is very strong, the integration is going well and we are delighted so far with what we have achieved.”
It’s too early to make forecasts about how successful the merged Co-operative Group will become, but the ageing rocker Marks clearly wants to keep the organisation beating to the rhythm of growth.
On your marks
Age: 58
Lives: Bingley, West Yorkshire. “A Bradford lad born and bred. It pains me to go over the border to Lancashire each day on the M62 to Manchester”
Family: married with two daughters
Interests: plays golf and racquet ball and is a keen follower of Bradford City Football Club. Plays drums in a rock band, Last Orders
CAREER HISTORY
2007: became chief executive of Co-operative Group, when it merged with United Co-operatives
2002: made chief executive of enlarged United Co-operatives, when United Norwest and Yorkshire Co-operatives merged
1967-2002: joined Yorkshire Co-op as a management trainee in the food division before working his way up to become chief executive
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