Every £100 spent in a co-operative store generates an additional £40 for local suppliers, customers and employees, providing a real boost to the local economy, according to new research by independent economic analysts K2A carried out for Co-operatives UK.
The study, which followed money spent by customers of the local co-operative in Lincolnshire, shows the co-operative pound goes a long way, with money spent in Lincolnshire Co-operative increasing in value by going to local suppliers, to customers as a dividend and to employees in wages, who in turn spend a proportion of their money locally.
On conservative estimates, using internationally accepted benchmarks, every £100 a customer spends in the co-operative generates £40 for the local economy, researchers found.
Overall, this means that Lincolnshire Co-operative, rather than generating profits for outside investors or national or even global suppliers, generates nearly £100m annually for the local economy.
Ed Mayo, secretary general of Co-operatives UK, said: “Money spent in a co-operative is sticky money. It stays local, because co-operatives employ local people, are owned by local people and try to source from local firms that do the same. Every pound spent in a co-operative shop is a real boost to the local economy.
“In fact, every pound spent in a co-operative store changes hands five times, at diminishing levels, until the final penny leaves the local economy. This adds a wonderful life to any local community.”
Ursula Lidbetter, chief executive of Lincolnshire Co-operative, said: “We’re pleased with the results of this study which show our positive impact on our local economy. Everything we do as a co-operative society is for the benefit of our members who own the business, and their local communities.
“We support these communities in a numbers of ways – by providing the rural services important to people like foodstores and post offices, by giving local producers an outlet for their goods, by giving grants and donations to local groups and by making our members better off by sharing profits through the dividend.”
The study, which is the first conducted at such size and detail by any large UK convenience retailer, also found:
- The money generated for the local economy by Lincolnshire Co-operative is ‘sticky’ – after being passed on to suppliers, employees and customers it passes through local people’s hands five to eight times, generating local wealth and jobs in the process
- £5 million a year that would go to external investors in a conventional shareholder business is distributed to the 210,000 owner members of the society in Lincolnshire and Newark and local community groups. It can then be spent and kept local again
- It uses more than 600 local suppliers, almost half (47%) of which see their contract with Lincolnshire Co-operative as a significant part of their business
- Lincolnshire Co-operative supports small local suppliers – by helping them grow their business to a scale where they can supply a large retail operation and, where local businesses supplying Lincolnshire have faced difficulties, the co-operative has stepped in to sustain the business
- Sustain 2,800 local jobs in all parts of the business