Co-op puts purpose before profit to combat Covid-19
‘PURPOSE before profit.’ That’s the message from the Channel Islands Co-operative Society as it works to support islanders amid the impact of Covid-19 on trading.
In its latest annual report, acting chief executive officer Mark Cox, pictured right, said that many new protective measures had been introduced to keep people safe at this difficult time. These included support centre colleagues working from home and stores managing social distancing as the retailer responded to the pandemic in the interests of staff and customers.
‘These changes and other impacts such as the higher levels of absence and the need for temporary resource will come at an increased cost for the society in the year ahead,’ said Mr Cox.
‘The outlook remains challenging, however it is only right that we, as a co-operative member-owned organisation, put purpose before profit and play our part in looking after colleagues, members and the wider community.’
Society members, customers and colleagues who have ‘truly gone above and beyond’ were praised by Mr Cox, who also offered an upbeat assessment of the future. ‘Over the past 100 years the society has faced and conquered many different challenges.
‘Your society is a strong business and with your loyal support and with the support of our colleagues, I am confident that, as those that came before have done, we will work through the challenges the year ahead will bring and we will continue to develop and protect long-term member value.’
In the annual report, the directors noted that the board and executive management team had concluded that the pandemic was not expected to have a material adverse impact on the food, medical, pharmacy and funeral care businesses. A decrease in fuel sales was expected due to an increase in home-working and school closures.
‘There will be material effect on the financial performance of Offshore Leisure Limited, which operates the society’s Travelmaker business, but this effect will not be material to the society as a whole,’ added the directors.
‘The society has extended an unlimited guarantee in favour of Offshore Leisure Limited to ensure its solvency at this difficult time.’
A short-term reduction in its investment property was also anticipated, together with the potential for a short-term cash flow impact in cases where rental holidays have been agreed with tenants on a case-by-case basis. A short-term increase in the funding deficit of the defined benefit pension scheme was expected due to a reduction in the value of the scheme’s investments.
‘The executive management team has taken extensive measures to counteract the potential threats to the society’s operating capability, including facilitating remote and flexible working and the recruitment of additional colleagues. The society has also developed an online ordering facility, so that vulnerable members and customers can order deliveries of essential food,’ said the society’s directors.
‘Whilst these measures will result in additional cost, the board believes they are necessary to support the society’s members, the communities it serves and to protect its commercial operations.’
Meanwhile, options for the future of the society’s loss-making Jersey medical care business will continue to be explored which will see it transferred from its ownership once the Covid-19 crisis has passed.