Comment: Community ethos is a model for business
AUSTERITY might spell gloom for a lot of us, but it is putting a spring in the step of the co-operative movement.
New figures suggest that the more difficult economic climate has helped boost the fortunes of the consumer-owned, socially and environmentally concerned segment of the business market.
The UK co-operative sector easily outran the wider economy last year, registering growth of 1.5 per cent against just 0.7 per cent for an area dominated by shareholder-owned businesses.
Co-operative growth in Scotland, where some of the best-known players include First Milk and the Scotmid Co-operative, averaged 1.1 per cent.
It is the fourth consecutive year that the UK co-operative economy has outperformed the wider economy, so we are clearly not talking blips.
And it is surely no coincidence that this extended period of looking for value – and implicit ethical commitment – by shoppers, in areas from groceries and funerals to financial services, has coincided with the 2008-9 recession and subsequent extended downturn.
Numbers of co-operative enterprises have surged over that period. Adherents of the consumer or staff-owned business model, whose high-profile UK members include the likes of the Co-operative Group and John Lewis Partnership, will say it shows that sharing ownership and control this way rather than with shareholders is patently successful.
And is it naive to wonder whether the near‑collapse of the banking sector a few years back, and the sovereign debt crisis and austerity era that followed it, has focused consumer minds on effectively investing in businesses with a strong community ethic from renewable energy co-ops to co-operative schools?
Volvo driver seeks to attract sportier cars
IN HER own words, Alliance Trust chief executive Katherine Garrett-Cox says her organisation, the largest general investment trust in the UK, is more a utilitarian Volvo than a sporty coupe. But at a City of London forum yesterday she said it might be some racier investors who could benefit over the next bleak few years economically by exploiting the opportunities from businesses running into difficulties.
Garrett-Cox, who ironically has had one or two of her own problems with activist investors at the Scottish company, reckons that against an unremittingly challenging macro economic backdrop a lot of companies will go to the wall.
The Alliance Trust boss says therefore so-called “vulture” funds with access to cheap debt could justifiably think “our time has come”.
On the broader front, she told a meeting of the Association of Investment Companies that, in terms of equity allocation, Alliance favoured Asia but not necessarily Asian equities.
Foreign quoted companies with strong Asian exposure might be a better bet, she argued.
America was on hold until after November’s general election, Garrett-Cox opined, and it faced strong economic headwinds, but that country was still the most likely to “lead the developed world out of the post-crisis doldrums”.
And the eurozone? No contra-thinking there. Alliance remains bearish on the region’s stock market prospects as political dissension stalks the eurozone.
Tennent’s outshines the Magners fashionistas
DRINKS group C&C reveals sales of Magners cider have slumped badly since the start of March. No surprise. Little sunshine and much rain since then mean less desire for fashionistas to pour Magners over ice while texting a friend. And if ever a drink was sold on the innovation of ice it is the famous cider brand.
Still, all is not lost for C&C, domiciled in Ireland but largely run by ex-habitues of the old Scottish & Newcastle Breweries’ parish.
Sales of Tennent’s lager, well-known north of the Border and which C&C bought from Anheuser-Busch in 2009, have jumped 30 per cent in Ireland.
After the offsetting of good and bad news, it is likely that C&C’s full-year profits will come in towards the lower end of market expectations.
No doubt it will be hoping for better weather as we move into the business end of summer.
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Weather for Edinburgh
Thursday 23 May 2013
Temperature: 5 C to 10 C
Wind Speed: 24 mph
Wind direction: North
Temperature: 5 C to 13 C
Wind Speed: 16 mph
Wind direction: North east