'Boom' in community pubs as co-ops prove Covid-resilient
There are more community-owned pubs in the UK now than there were before the Covid-19 pandemic, despite the hospitality industry being decimated by repeated lockdowns, according to new findings from Co-operatives UK.
Activity in the hospitality sector, one of the most hit by Covid-19 closures, was down 48% in December 2020 compared to February of the same year. But the number of co-ops in the food services and pubs sector grew by 16% in 2020 – accounting for £44.6m in total turnover – according to the Co-op Economy Report 2021, published this week.
“While of course it has been a tough time for this sector, we are seeing something of a boom in community pubs,” said Dominic Mills, communications and marketing officer at trade body Co-operatives UK. “Because of their co-operative ownership, the community tends to be considerably more invested in these pubs and their success. They can boast more diversified revenue streams as a percentage, and will also act as community hubs. These factors have offset the Covid effect.”
The co-operative purpose, ownership and governance all dictate long-termism - Rose Marley, Co-operatives UK
Co-operatives have proved resilient during the pandemic, according to Co-operatives UK. The number of co-ops has increased by 1.2% to 7,237, while the number of businesses overall (including sole traders) has dropped slightly, by 7,405 (out of a total of around 6m), according to ONS figures quoted in the report. While the drop is minimal, it is a marked change from the previous year, when the number of businesses overall grew by 113,000.
Counter-cyclical and confident
Resilience has been a constant feature of co-operatives throughout their history. Some researchers have described them as “counter-cyclical”, as the co-operative sector tends to grow faster in times of crisis, explained Dr Rory Ridley-Duff, professor of co-operative social entrepreneurship at Sheffield Business School.
Cumulative turnover for all co-operatives in the UK has increased by £1.1bn to £39.7bn (a 2.8% growth). This increase is however driven in great part by the Co-op Group and John Lewis and Partners, whose combined turnover (£11.5bn and £10.7bn respectively) account for more than half of the total sector’s revenue. With the two giants out of the equation, overall turnover in the co-operative sector was stable (- 0.0079%), which is still notable given the wider economic context – UK GDP was down 9.9% in 2020.
Co-operatives UK CEO, Rose Marley, said: “Why are co-ops so resilient? The co-operative purpose, ownership and governance all dictate long-termism. In an economic shock it’s the members calling the shots in their collective, long-term interests, not investors making decisions based on short-term returns. Co-ops patiently build up and reinvest reserves and use members’ capital wherever possible, rather than piling on debt to achieve faster growth.”
Simply on hard-nosed economic grounds, it makes sense for co-ops and employee ownership to be an integral part of our economic strategy - Sheffield mayor Dan Jarvis
Co-operatives also display high levels of confidence, with 61% of small co-ops saying they had ambitions to grow and/or develop in the first quarter of 2021, compared with 53% of small businesses generally, according to the report.
A group of co-operative bosses, including Steve Murrel, CEO of the Co-op Group, wrote to the UK chancellor Rishi Sunak on Monday, calling for better business support for co-operatives, highlighting their potential in helping rebuild the economy after the Covid-19 crisis.
Speaking at the Co-operatives UK congress on 25 June, Labour and Co-op mayor of the Sheffield City-region Dan Jarvis said: “Simply on the most narrow and hard-nosed of economic grounds, it makes sense for co-ops and employee ownership to be an integral part of our economic and industrial strategy – not as a sentimental or ideological tokenism, but because of the contribution they can make, to increasing employment, growing our economy and shifting it to a higher value, higher wage production.”
Lord Victor Adebowale, chair of Social Enterprise UK and a non-executive director at the Co-op Group, said: “At a time of political and community division, what could be more important, and what could be more necessary to get over the hump that we've created across race across gender, than the very word, the very action, of cooperating and doing that in a way which is commercially beneficial?”
Top picture: The Antwerp Arms, a community owned pub in Tottenham (photo courtesy of Power to Change)
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