Annual Review 2020-2021 - Southern Co-op
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Annual Review 2020-2021
WHO WE ARE
Southern Co-op is a regional, independent co-operative
operating more than 280 food, funeral and Starbucks coffee
branches across the south of England, as well as a number of
Welcome convenience franchise stores.
As a large co-operative, we have a commitment to
sustainable business and a promise to provide a fair, fresh
approach, for all.
CONTENTS
About Us 04 Sustainability Report 34
Year in Highlights/Member Value 06 Climate action 36
Chair Statement 08 Community 40
Chief Executive Review 10 Nature 44
Trading Report 12 Responsible production 46
Food Retail 14 Suppliers 48
Franchising (Welcome 18 Risk Including COVID-19 Report 50
and Cobra Coffee)
Appendix 60
End of Life Services 22 Governance Report 62
Registered Office and Trading Address People 26 Full Accounts 94
1000 Lakeside, Western Road,
Portsmouth,Hampshire, PO6 3FE
Telephone: (02392) 222500
Fax: (02392) 222650
www.southernco-op.co.uk
Purpose & business strategy
Southern Co-op enterprise risk management
Stakeholder insight end poverty, protect our planet and ensure that everyone
can enjoy peace and prosperity. This will only be achieved if
businesses, like ours, get behind them.
External benchmarks (e.g. BITC’s Responsible Business Tracker)
We’ve reviewed each goal alongside Our Plan, considering
OUR PURPOSE,
Alignment with wider co-operative movement and specifically a range of factors. We’ve identified goals where we believe
we can have the greatest impact. Climate action remains our
Co-op Group’s Sustainability Plan more important priority.
Societal trends/emerging issues You can view our progress in our Sustainability Report on
VISION & VALUES
page 34.
Existing & future legislation Sustainable Development Goals There are other areas of activity which support the broader
set of goals which we’ve highlighted using the relevant icon
Competitor activity We’re committed to supporting delivery of the United Nation’s throughout the report, such as the Co-op’s work on fairtrade
Sustainable Development Goals (SDGs), described as the which ensures workers in our global supply chains get a fairer
world’s ‘to-do list’ and focused on addressing the world’s deal and contributes to reducing inequalities (Goals 1 and 10).
biggest challenges. They are a universal call to action to
Working together
for the benefit of our Southern Co-op Compass
We believe it is important to bring a range of lenses to our
and our commitment to being a responsible and sustainable
business. We do this in a transparent, evidence-based way,
building trust and enabling our members, colleagues and
communities decision-making. Our purpose, as this ultimately steers and others to understand what we are doing, why and how..
guides our business; the needs and interests of our colleagues,
members, customers and other stakeholders; ethical, In 2020, we began using a new Southern Co-op Compass
community and environmental impacts and opportunities, tool (see below), designed to support decision-making within
alongside commercial and potential reputational impacts for our business, ensuring that every strategic decision we make is
our business and brand. informed and considers different lenses, whilst also supporting
the delivery of Our Plan and remaining consistent with our
Our business was founded in 1873, as a response to the
societal challenges of that time – exploitation, inequality and
life-threatening poverty – with a vision of creating a business
OUR DECISION MAKING COMPASS
This approach enables us to demonstrate our Co-op difference co-operative values and behaviours.
that would help people to help themselves, and meet the What’s changing for our colleagues and how significant is it?
needs of all, rather than a few rich shareholders. Does it create opportunities for employment or development?
Do we have the resources and competencies available to do this?
These societal challenges unfortunately still exist today in people Could we do this in partnership with others?
Would our colleagues understand why we’re doing this?
one form or another, alongside environmental challenges like
climate change, declining natural resources and threatened
Champion responsible business
wildlife and habitats. Does it feel fair?
P
PUR OSE
Is it for all? Can anyone join and share in our success?
We’re owned by local people and run an ethical and Are there any reputational risks/opportunities?
responsible business, working to benefit people and
brand Does the masterbrand prevent us doing this?
communities across the south. We exist to meet their needs
and we stand up for the things that they believe in.
How does it impact our communities?
o m m u n ti e s
Wo
We’re part of the co-operative movement which promotes Could a community solution help a key business issue/priority?
Does it help address a community issue?
organisations with a clear social purpose, and our co-operative
community Does it support the community objectives in Our Plan?
rking to g
values and principles continue that tradition. We’re here
to create value for our members and the communities in
which we trade, and can only do this by running a successful Our Plan continues to steer our long-term plan for a
business. sustainable business, setting our strategic direction and Is it commercially viable and what is the financial ROI?
mid to long-term objectives and enabling us to review ! Are there any exisiting or likely future legal/regulatory impacts?
Does it support the mitigation of risks? (refer to matrix)
Co-operating for a fairer and sustainable world our progress as we move through this year and beyond. commercial
rc
et What role does technology have to play?
er
ou
h
Given the unprecedented and far reaching impacts
of
Our vision is to use the power of co-operation to create a fairer,
fo
r th t
society and sustainable world. of the COVID pandemic, this year we will be taking
e b e n e fi
Is it insight led?
the opportunity to fully review this plan in line with Does it meet a member/customer need?
our strategic planning cycle. This will ensure that our Could our members/customers understand what we’ve done & why?
We offer a range of products and services which create value Does it create social and commercial value for our members?
in its broadest sense for our members. So when you spend at objectives and supporting business priorities and members How does it enhance member and customer experience?
Southern Co-op, it does good for you, your local community programmes of work adequately reflect the changing
and communities across our region and around the world. It’s landscape and continue to address the needs of our
what we do. members, colleagues and other key stakeholders. Does it champion responsible business?
Does it have a local, national or global environmental impact?
Will it impact/create collaborative opportunities with suppliers, partners or others?
Being a member means you support a thriving, sustainable www.thesouthernco-operative.co.uk/our-plan/ Does it support us in embedding & inspiring responsible business?
regional business and you enjoy a share in that success. sustainability Does it support the responsible business targets in Our Plan?
4 S O U T H E RN C O -O P A NN UA L R E V I E W 2 0 2 0 / 2 1 SO UT HER N CO - O P AN N UAL R EVIE W 2 02 0/ 21 5
Year in
56%
Number of active members (traded
with us in last 12 months)
8.08%
Number of virtual training sessions
delivered to colleagues
Amount of trade with our members
as % of retail and funeral turnover
28
Number of
new trading
sites opened
7.34% 504 7.84%
Amount of trade with our members
as % of total turnover
Like for like food sales
Funeral plans sold
132,051
5.02%
Total members (at January 2021)
£1.48m
Total sales growth Contribution to
communities
5,996
Number of new
members this year
£490.3m £18.7m
Total income £35,159
EBITDA
*EBITDA as measured internally is earnings before interest, tax,
Charitable donations from member
share of the profits
depreciation, amortisation, property revaluations and distributions.
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CHAIR “Our support for communities
was critical last year and will
remain so this year, as we
STATEMENT move into a recovery phase.”
Throughout 2020 and into 2021,
we have all been in the grip of the
pandemic; bringing drastic, far-
reaching changes to our lives.
Throughout this time, our guiding light has been our to be there for people when they need us most – giving Our engagement continued with you in 2020,
purpose: ‘working together for the benefit of our the best end of life care, support and experience with albeit in a different form, with more digital
communities’, as our colleagues worked tirelessly and compassion and dignity. We will also continue to grow our communication and our first virtual AGM which
selflessly to enable people to access the food and services Starbucks franchise. was well received.
they needed.
Our support for communities was critical last year and will We’ll continue to use all means and channels
The Board and I are tremendously proud and thankful to remain so this year, as we move into a recovery phase. available to us to engage with you as members in
each of our colleagues for their hard work and resilience Last year, we contributed £1.48m to our communities, our business. I hope you are continuing to enjoy our
throughout this crisis. I would also like to thank our which included channelling more than £116,000 of funding new, refreshed membership package and the suite
members, for their kindness, support and loyalty – their into existing and new partnerships, such as Neighbourly of new benefits launched at our AGM last October.
positive words and heartfelt gestures have lifted spirits, Community Fund, FareShare and NHS Charities Together. (See https://www.thesouthernco-operative.co.uk/
made our jobs easier and kept us going. This funding provided care and support for the most membership/member-benefits)
vulnerable in our communities and our members and
Sadly, last year we also saw an unacceptable 80% increase in customers joined these efforts, raising an additional We have much to do in the year ahead to rebuild our
assaults and violence against our store colleagues, so we have £54,000 to help these partnerships. communities and economy; this will not be achieved
continued, through our Protecting our People programme, to without collaboration and we will continue to work
make sure all our colleagues feel supported, safe and protected With the 26th UN Convention on Climate Change on the together for mutual benefit with our community
when working and have continued to raise the profile of this horizon in November 2021, there is now both an imperative partners, suppliers and other co-operatives.
issue and lobby for better protection for shop workers. and an opportunity for the world to unite to tackle climate We look forward to your ongoing commitment and
change. I am therefore pleased that, under the stewardship engagement with us to build a better, brighter future.
While business continuity was our priority in 2020, ensuring of our Climate Action Group, we’ve taken the necessary steps
long-term success through investment in, and development to define, scale and accelerate our climate ambition. We have
of, our strategic priorities and programmes continued (see announced new and stretching targets for carbon reduction
your Chief Executive’s Statement for detail). Our 2021 focus that reflect best practices and the latest science covering
for our retail business will be on sustaining service levels both our operations and our value chain, to take that vital first
and evolving our response to market and customer trends step on a pathway to net-zero carbon. This is supported by
driven by the pandemic, some of which could have a lasting a comprehensive climate action plan setting out the activity Mark Ralf
impact. Our colleagues in End of Life Services continue and investment required to deliver our ambition. Chairman
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CHIEF
EXECUTIVE The predominant difference between the two measures of
profit I’ve quoted for 2020 is this year’s accounting charges
on our extensive and ongoing investment in new stores and
In our plans for further growth across both convenience
store channels and in coffee, we’re aiming, subject to
market conditions, for a similar total number of new stores
“I’m proud and grateful to my
4,000 colleagues, to be able
REVIEW
other assets. As such, it’s the EBITDA figure that we can in 2021. If future market conditions are as we anticipate, we to say that we successfully
think of as a cash profit. plan to continue this growth across our businesses over the
medium term. rose to the unprecedented
Our banking facilities remain unused, giving significant COVID challenge.”
headroom to take up future investment opportunities. During the last quarter of 2020, we began piloting an online
Our closed Final Salary Pension Scheme also remains in grocery shopping and delivery model from our core store estate
accounting surplus for the sixth year. Overall, I believe this in partnership with Snappy Shopper. This new channel to market
is a credible financial performance for Southern Co-op in for us is currently serving customers from a pilot group of stores
these exceptional conditions. It’s consistent with the trend in Portsmouth and Chichester. We will build out the full scope of
Much of our focus this year has, for modest, but sustained, annual profit growth described in the trial during the first half of 2021 before evaluating next steps.
my report last year.
unsurprisingly, been on business We also have plans in place to invest further in technology and
continuity in the exceptional This result is also in line with our medium term plan to build other equipment to build efficiency throughout our front-line
circumstances we have all found profits by the middle of this decade, having absorbed the and central operations. In 2020, this focused on significant
significant cost of several years of above-inflation National investment in self-checkout units. We aim to complete the rollout
ourselves in. Living Wage increases. of this important part of the programme during 2021.
We recognised from the outset the responsibility we As COVID restrictions unwind, we want to optimise how and
had to help meet the wider imperatives of feeding Trading
where our central teams work, accommodating where possible,
the nation, and providing essential services to the
Like-for-like (LFL) Food Retail sales grew 7% in 2020 on those who want to work differently in the future.
bereaved in especially difficult times.
a comparable 52 week basis. This reflects some impact
I’m proud and grateful to my 4,000 colleagues, from the pandemic, particularly in the first half. Outside of a Building back better
to be able to say that we successfully rose to that spring peak linked to panic buying, this growth is broadly in
unprecedented challenge in our front-line businesses, line with the longer term sales growth trend that predates More generally, as we all begin to plan for a time beyond
whilst seamlessly switching our central support teams COVID. As such, 2020 is the third successive year in which the pandemic, we want to play our full part in building back
to remote working. we have grown LFL food sales by 3% or more. better.
Our funeral home and crematoria operations have seen In addition to our existing programmes, we will be focusing
Our financial performance higher than planned volumes of activity in 2020. COVID on three key build back areas.
constraints limited the full range of client services we were
Our 2020 financial results include the overall impact These are;
able to offer, and our teams worked incredibly hard to
from a wide range of different pandemic factors as
maintain high levels of service while supporting bereaved • Addressing climate change
well as our underlying trading. This year, we’re also
families.
reporting an accounting year of 53 weeks, which further • Helping young people into work
complicates comparisons of performance with 2019. • Continuing to challenge unacceptable levels
Our Starbucks stores were in enforced closure for an
extended period in the first half. They have since traded well of crime and abuse against our store colleagues
In this report, I’ve sought to draw out key figures from
given the numerous and frequently changing restrictions
our results for the year in the context of underlying
kept in place. This is a reflection of the huge commitment Working with other organisations such as
trends and our expectations for 2020.
of our 300 partners who work in our Starbucks stores. We Business in the Community under the
expect a strong bounce back in profitability for this business patronage of HRH The Prince of Wales, we
Southern Co-op as a whole achieved an EBITDA*
as restrictions are lifted. will get the widest benefit from individual
profit of £18.7m and PBT** £2.1m. These figures are
initiatives. In doing so, we will demonstrate
both slightly ahead of 2019, with the main driver being
our ongoing commitment to being a
our increase in food sales growth, with the additional
responsible business, and re-state our belief
LOOKING BEYOND COVID
trading week estimated to have contributed £0.3m and
that business is a force for good.
£0.1m respectively of the improvement.
Your support this last year, and on the build
During the year, we received government support related
Continued business investment back better journey ahead, is a fantastic
to COVID that was more than offset by significant additional
source of strength for Southern Co-op and
business-wide costs from the multitude of COVID response
As we continue to tackle the ongoing challenges of COVID, is much appreciated by all of us.
measures we have taken, along with temporary closure
we’re also actively looking to invest through, and beyond
losses in coffee. Further detail and information about the
the pandemic. As part of this strategy, we added a total of
impacts of and responses to COVID on the Society can be
17 new food stores during 2020. Of these, 15 stores were
seen on pages 56 to 59 of this report.
added in the Welcome format as we continue to build out
*EBITDA as measured internally is earnings before interest, tax, depreciation, our convenience store franchise channel. This is now a 50
amortisation, property revaluations and distributions store business. We also added 11 stores to our Starbucks Mark Smith
** PBT – profit before tax franchise estate during the year. Chief Executive
10 S O U T H E RN C O -O P A NN UA L R E V I E W 2 0 2 0 / 2 1 SO UT HER N CO - O P AN N UAL R EVIE W 2 02 0/ 21 11
In partnership with southern co-op
In partnership with southern co-op
Operating across Food Retail, End of
Life Services and Coffee, our trading
report details our performance and
achievements over the last 12 months
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Food Retail Improving the range
income : £457.3m With growing customer popularity, we have worked with
COOK to introduce the range into an additional 11 stores,
including our new Broadbridge Heath store.
Simon Eastwood
Chief Operating Officer
– Retail
Coffee to go
Due to COVID restrictions, customer demand for food to
go declined, but we continued our rollout of coffee to go
Self-checkouts Home delivery with a reduced programme. We enhanced the offer with
new machines in two of our stores and introduced this as
In 2020, following the successful trial of self-service checkouts In September this year, we launched the trial of a new home a new service completely in two other stores. We hope
(SCO), we made strong progress in the rollout of this service delivery service in partnership with service provider Snappy that as restrictions lift, we will see the demand for coffee
to more of our estate. To date, 62 stores have now undergone Shopper. The trial initially started within a relatively small to go increase, so we are working on a plan for further
works to install SCOs with 214 units now in use in our stores. radius around our Portsmouth and Chichester retail stores, rollout in 2021.
and has already expanded into more surrounding areas due
Customer reaction has been positive and we are seeing more to its success with our customers.
and more of our customers migrating across to this method of
checkout, whilst maintaining our colleague manned operation The service is provided via a digital app, where customers
for those customers who don’t want to, or are unable to use can order goods and have them delivered to their door
these. We are currently seeing, on average, in excess of within 60 minutes. A wide variety of products are available to
40% of transactions being processed this way, freeing up order, from fresh produce to everyday essentials.
colleagues to ensure we’re able to offer an enjoyable, safe and
efficient shopping experience. The service has been so popular that we have completed
over 1,500 deliveries. We’ll enhance this service as we start
to understand shopping habits, and plan to introduce this
across more of our trading estate over the next year.
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VME system put to the test
The impact of customer shopping habits at the start of the
pandemic was a real test of our newly implemented VME sales-
based ordering system. To ensure supply was smooth across
stores with no unnecessary strain put onto the supply chain,
we were able to bring forward our plans for automation of the
stock ordering process in stores in key categories, including
Amazon lockers all of our ambient products, with the exception of promotional
items, and our longer life fresh and frozen products. This has
Following a successful trial of Amazon lockers, we continued
given stores a simpler process, allowing teams to concentrate
the rollout to a further 75 stores. These lockers are not only
their attention on looking after our customers.
a hub for Amazon delivery collections, but provide another
opportunity to bring customers into our stores.
New stores
In August this year, as coronavirus restrictions were
beginning to ease, we were able to successfully launch our
brand new store at Broadbridge Heath, near Horsham. In
addition, we opened a new store in January 2021 in Andover,
Picket Twenty.
Both stores offer everything our customers have come to
expect along with a range of the premium frozen foods from
COOK, Amazon lockers, a range of hot food and coffee to
go, as well as Local Flavours and self-service checkouts.
Local Flavours
Our local suppliers have had a challenging year given the
COVID pandemic. We’ve offered a relaxation of payment
terms to some of our smaller suppliers as well as making
changes to prices or ranges where required.
All of our suppliers have been contacted regularly throughout
the year to reassure them of our commitment and our
willingness to offer ideas or solutions to their challenges.
A number of suppliers were able to increase volumes of
supply through periods of high demand, in particular, our
suppliers of local eggs. The continued strong sales during
2020 shows what a soaring success our local products and
suppliers are.
The local supplier assurance scheme (audit programme)
continues to work well since launching in 2019, offering support,
guidance and assistance to suppliers in their understanding of
what retailers look for from smaller suppliers.
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Wearecurrentlytheonlyfoodretailer
withfullBritishFranchiseAssociation
membershipstatuswhichisreflectiveof
thehardworkfrombothourfranchise
Franchise food supportteamandourfranchisees.
total income : £2.7m
WELCOME
Welcome is celebrating a successful 2020 with 15 new franchise
stores opened this year. A total of 48 stores and 22 franchisees
now operate under the Welcome brand. This year, we have
worked with franchisees to introduce initiatives such as refill
stations, milkshake and ice cream machines, fill your own water
stations and Too Good to Go, which reduces potential food waste
going to landfill. We’ve also installed self-checkouts, making a
total of six stores now offering this service.
This year, after a rigorous vetting process, we are very proud to
have gained full membership of the British Franchise Association.
We are currently, the only food retailer with full membership
status which is reflective of the hard work from both our franchise
support team and our franchisees.
15
new stores
opened
18 S O U T H E RN C O -O P A NN UA L R E V I E W 2 0 2 0 / 2 1 SO UT HER N CO - O P AN N UAL R EVIE W 2 02 0/ 21 19COBRA COFFEE Total income :
£8.7m
NHSCT logo
to be supplied?
This year, Cobra Coffee’s aim was
to navigate through COVID-19 in
a safe and successful way for our
partners and customers whilst still
growing the business. There have
been times when all stores have
been closed but we have operated
when and where we can to support
the communities that we serve. We’re working with NHS Charities Together
For more detail on our COVID to develop a long-term relationship and
response, please see page 56. have provided NHS workers with free
We have ensured that coffee at various times throughout the year.
Growing business where our partners have In addition, we have given food and drinks
During 2020, we grew from 20 to 30 stores after taking been furloughed, their pay to charitable causes in our communities
on four new Starbucks equity stores in Bristol and opening
has been topped up to 100% over the last year, particularly during
new sites in Reigate, Dorking, Tunbridge Wells, Wokingham
March when our stores had to close at
and Bournemouth, as well as our second Drive-Thru to protect their income. short notice.
business in Brislington (between Bath and Bristol.) Our 31st
store opened in Worcester Park in Greater London on 8
January 2021. We also completed major refurbishments in
our Canterbury, Hove and Bath stores.
Technology advances is mandatory. This has proved particularly helpful to ensure
training on COVID protocols. In addition, it has helped to
All our stores have completed a full hardware and software support positive mental health for our partners, many of whom
replacement onto Starbucks’ new global cloud-based system. were self-isolating or spending time at home during lockdown.
This has huge technological and customer benefits with
improvements to the Starbucks app and rewards system to Throughout this year, we have ensured that where our
drive connectivity and loyalty. We have launched Mobile Order partners have been furloughed, their pay has been topped
and Pay, which is an order ahead facility for customers who up to 100% to protect their income. We set up Cobranet,
are on the move and don’t want to queue in store. We have an employee assistance fund in association with Starbucks
also partnered with Uber to enable a delivery service and have which 19 partners benefitted from to help them through
seen strong incremental sales. Our own website and LinkedIn particular hardship.
page have been developed to generate better awareness of
Cobra Coffee as we grow.
People progress
We now have over 300 partners and three district managers
within the business. This year, both head of operations and
HR business partner roles have been created. Whilst our work
this year has been focused on process alignment and building
solid foundations, we have plans to develop our culture.
Training has had to change and we have introduced an app-
based portal that uses gamification. The Attensi app system
focuses on initial induction, core skills and behaviour-based
modules, encouraging repeat play to develop understanding.
Most modules are under 10 minutes in length and the
system provides reporting to aid compliance where training
20 S O U T H E RN C O -O P A NN UA L R E V I E W 2 0 2 0 / 2 1 SO UT HER N CO - O P AN N UAL R EVIE W 2 02 0/ 21 21Total income :
Steve Pearce
£18.3m Chief Operating Officer –
(ELS) End of Life Services
Branding and funeral This year, six Caring Lady funeral homes
migrated across to a new dual brand
home environment with The Co-operative Funeralcare.
The transition of other private name
Our funeral home in Leigh Park was
brands moving to this concept are being
relocated to a brand new location
individually assessed, but the overarching
Despite the pandemic, our focus has approx. 200 yards away. The new branch
aim is to provide a fresh, updated feel to
has been fitted out with our new brand
remained on developing our offer and specification, ensuring a warm, modern
our funeral homes, assisting in identifying
the funeral homes operated by Co-op
and welcoming ambience for clients.
delivering the very best end of life care Group and ourselves.
to the bereaved people we support. Vehicles
Funeral planning This year, we took delivery of our first hybrid
hearse and limousine on the Isle of Wight,
HM Treasury began an investigation into the pre-paid funeral plan market with two similar vehicles being added to the
in 2019. This year, they’ve announced that in 2022, the market will become wider fleet. We also completed negotiations
fully regulated under the Financial Conduct Authority (FCA). We fully support to receive our first electric Tesla hearse in
this decision as it ensures a robust set of standards is achieved. We await addition to two mild hybrid ambulances –
guidance as to what this means for our own funeral plans. these will be received and operational in the
early part of 2021.
Our funeral plan sales have reflected the overall general downward
trend of this market due to the uncertainty of the FCA and COVID-19,
however, it remains an integral part of our funeral business.
Funeral operations
Our funeral operations structure has been reviewed this year and is now
split between client experience and funeral operations and logistics.
This gives the benefit of improved focus for both clients and colleagues
enabling us to ensure we continue to give the best level of service.
We completed negotiations to receive our
first electric Tesla hearse in addition to
two mild hybrid ambulances
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020/21 23IMAGE ON JANET?
JANET QUINTAVALLE
Bereavement Co-ordinator
“This is my 8th year at The Bereavement Centre and I can
hand on heart say it has been the most challenging year
for my colleagues and I. There have been highs and lows
Digital experience
CLOSURES throughout the year, and learning a new way of working has
possibly been the biggest test for all of us.
As the world continues to become more reliant on digital Florist
technology, we have completed additional work to improve our
Working from home has meant changing how we work within
client experience. Against the backdrop of COVID-19, all hard copy We relocated our florist to Lakeside in 2012 to the communities we serve. We have been offering training
brochures were digitalised and the experience of organising a improve retail performance and attract more sessions online and our counselling has had to be switched
funeral was moved to docusign software to make processes more customers. However, we have faced strong from face to face to phone counselling. Learning different skills
streamlined. We also enhanced our website www.funeralcare.co.uk challenges from a declining market, due to charitable has been an exciting challenge which we have all risen to.
donations in lieu of funeral flowers, and an increasing
Our online tribute and donation system, www.muchloved.co.uk number of retail outlets and online businesses We have continued to support nursing homes, care homes
grew in interest this year and we surpassed £1m in donations being now selling and delivering flowers. After careful and hospital staff throughout this pandemic; the media
donated via the platform. consideration, we closed the business permanently has shown us the great challenges and losses that our
at the end of August 2020. community care professionals are facing daily. For every
CREMATORIA & NATURAL BURIAL GROUND Langford’s Monumental Masonry
loss there is a grieving family and our counselling service
has supported people through this difficult time in greater
The Oaks volumes than normal.
Similarly, due to decreasing sales volumes, we took
We continue to invest in landscape works to enhance and the decision to close this business at the end of Our online training sessions have allowed community
enlarge the wild flower meadow and are pleased to announce September 2020. organisations to continue with personal development to
approximately four acres of adjacent woodland have been support them in their roles. The changes and developments
acquired near the site so we can develop this area further. in the way we work have opened many doors to a variety of
organisations, bringing the name of Southern Co-op Funeral
East Devon Crematorium Care in to many new workplaces.
East Devon Crematorium (EDC) performed as expected this year We have also supported our ELS colleagues who have
after having internal and infrastructure works completed in 2019- worked tirelessly to deliver above and beyond care and
20. This year we plan to reconfigure the overflow car park and support to families during this unprecedented year.
enhance the landscape even further.
At the end of 2020, our manager, Ingrid, retired. Although
this was sad for us, we are pleased that Ingrid is starting a
Clayton Wood Natural Burial Ground new chapter of her life. Over the years, Ingrid’s passion and
knowledge have been embedded in her team, and we will
Our natural burial ground situated in West Sussex performed as carry her passion with pride to support our communities.
expected with various works completed to enable the whole site to
be open in 2021. Looking forwards, in 2021, we’re rebranding to Bereavement
Care. While the name will alter, the fundamental purpose
Our planning application for a new crematorium in South Godstone, of what we do will remain unchanged – providing support,
Surrey was sadly turned down but we continue to search for understanding and care to those dealing with bereavement.”
suitable locations to grow our presence in this market.
24 S O U T H E RN C O -O P A NN UA L R E V I E W 2 0 2 0 / 2 1 SO UT HER N CO - O P AN N UAL R EVIE W 2 02 0/ 21 25Sarah Kavanagh
Business Transformation
& HR Director
Global pandemic & employment
The global pandemic had a significant impact on the UK employment market
in 2020, reversing trends such as unemployment, which has increased for the
first time in four years, reaching 4.9%, while the number of redundancies across
the UK reached a record high of 370,000 in the three months to October 2020
(Source: ONS December 2020). However, two groups are widely reported to
have been more negatively affected than others by these events; firstly, the
over 50s, where 1 in 4 over 54s were furloughed and 1 in 5 are now working
fewer hours. Particular concerns for this group are job security, the ability to
get back into work if made redundant, health, including the long-term effects
of COVID-19, and pension savings. The second group is young workers, the
under 24s; 1 in 10 young workers lost their job due to the pandemic, and 6 in 10
are now earning less.
The pandemic has however provided opportunities and brought about
positive change, for example, where and how people do their work, with
remote or home working becoming the norm. According to a CIPD survey
of over 1,000 employers, those working entirely from home rose from 9% to
22%, while those who worked partially from home rose from 10% to 37%. This
trend has advanced the flexible working agenda and is set to continue for the
foreseeable future, creating opportunities for both employers and workers, as
with the right technology, location is no longer a barrier to employment.
Colleague wellbeing
While the general consensus has been positive, with colleagues saying
it provides them with a better work/life balance, as an employer, we have
also been mindful that for some, working remotely can have negative
impacts on wellbeing; individuals may experience feelings of isolation
caused by less interaction with peers and managers. Additionally, many
colleagues have had to balance their work with added pressures such
as home schooling, so providing information, support and advice to
colleagues on how to maintain good mental, physical, social and financial
wellness continues to be a focus for us.
Following a reorganisation within the HR function in the summer, a new
wellbeing manager role was established to provide expertise in this
important area. Key responsibilities in 2020 were: the co-ordination of
“Despite the obvious challenges, our Critical Incident Response, providing much-needed specialist support
to those front-line colleagues who have been victims of violent incidents
the pandemic has provided in the workplace; the management of colleagues who were placed in the
extremely clinically vulnerable/clinically vulnerable categories during the
opportunities and brought about pandemic, and the management of our colleagues who are long-term sick,
with the aim of assisting as many colleagues as possible back into the
positive change.” workplace. In 2021, we will launch the annual wellbeing calendar, a series
of activities to help our colleagues maintain good health.
To find out more about our COVID response, please see page 56.
26 S O U T H E RN C O -O P A NN UA L R E V I E W 2 0 2 0 / 2 1 SO UT HER N CO - O P AN N UAL R EVIE W 2 02 0/ 21 27Attraction and recruitment
Retention and labour turnover
We have continued to work on our employer brand. In February,
our new careers site launched with videos and information In recent years, we have put in place a number of interventions
providing candidates with an engaging experience, giving to reduce labour turnover across the organisation, especially
insight into what it’s like to work at Southern Co-op. Further within Retail. High labour turnover can be disruptive to our
enhancement is planned in 2021, when we will launch an internal operations, as it lowers capability and makes succession
Pay, benefits & incentives Minimum Wage (NLW) rates were uplifted, with the adult careers portal, providing existing colleagues with visibility of the difficult. During this challenging year, colleagues have chosen
NLW rate increasing by 6.2% to £8.72 per hour. Given the career and development opportunities available to them. to remain with us resulting in a reduction in our voluntary
We recognise that our success is a team effort. All our government plans to invest in the NLW in coming years by labour turnover of over 15%.
Food Retail, End of Life Services and Lakeside colleagues reducing the upper age limit, this year we made the decision Throughout the pandemic, our stores and funeral homes have
participate in our annual bonus scheme, which is based to make an additional investment in the rate of pay for those played a critical role supporting customers and communities Having seen little change through 2019, we began 2020
on Southern Co-op’s financial performance. The 2019/20 aged 18 to 24; colleagues in Zone 1 stores received an 8.7% during a very difficult time. At the start of the lockdown in March, with labour turnover of 44.4%. However, we have seen an
financial performance meant the target to generate a increase to £8.46 per hour, and in Zone 2 the rate increased due to the surge in shopping demand, there was an urgent improvement month on month and end the year at 26%. This
payment under the scheme was achieved, which provided by 6.5% to £9.31 per hour, compared with the official NMW requirement to recruit additional colleagues to support our front- is an excellent result, and the first time it has been below 30%
over 4,000 eligible colleagues with a bonus payment in of £8.20 per hour for those aged 21 to 24, and £6.45 per line teams. for 15 years. It also ensures a more stable workforce, with
May 2020. hour for those aged 18 to 20 years. colleagues staying with us for longer. The median length of
Our team quickly adapted to the demand; recruitment and service has increased from one year to two years, while the
Additionally, the hard work and commitment of our The pay of our salaried colleagues is governed by a on-boarding processes were simplified to enable new colleagues average length of service stands at four years.
colleagues throughout 2020 have been amazing, comprehensive and externally recognised framework using to get started in store within a matter of days, which reduced
particularly going into the unknowns of the first period of Korn Ferry benchmarks. In recent years, we have continued our average time to hire from 13 days to five days. Over 350
lockdown. Our food stores and funeral homes worked at to make investment to increase our pay ranges, however, colleagues were recruited on temporary contracts over a six
full capacity to ensure the continuation of services to our balancing affordability and competitiveness has meant that in week period, which was more than double the normal offer rate
members, customers and communities. To recognise their some areas, our market position could be improved. Therefore, at this time in a normal year. We were delighted that 100 of these
contribution during this challenging period, we awarded a in 2020 we began a project to review our pay strategy and colleagues have subsequently secured a permanent position
one-off bonus of 10% of earnings for the period 15 March to develop a plan that ensures we establish and maintain a with us.
2 May 2020 to all front-line colleagues. competitive position over the next three to five years.
In 2020, we saw organisations taking the decision to Death in service Recruitment stats:
‘freeze’ pay, or postpone planned pay increases. We were
Vacancies: Rolling 12 months 2,203
able to continue with our annual pay review, which provided Sadly, each year we experience the death of a small number
a 3% increase for the general population with effect from of colleagues who are in service. This is a distressing time CVs received: Rolling 12 months 35,749
April 2020. The pay review for our front-line End of Life for the colleague’s family and friends as well as their work
Services colleagues is negotiated with the GMB Union and Online offers: Rolling 12 months 1,893
colleagues. The death of a loved one can bring unexpected
is subject to a ballot of GMBU members; an increase of 2.5% financial pressures, so our death in service benefit aims to Average time to hire (Retail): 13 days
took effect from February 2020. remove some of the anxiety this can cause by providing
Average time to hire (Retail temps): 5 days
financial support to the next of kin. In 2020, the next of kin
Also in April 2020, the National Living Wage and National of nine colleagues received a benefit under this scheme.
28 S O U T H E RN C O -O P A NN UA L R E V I E W 2 0 2 0 / 2 1 SO UT HER N CO - O P AN N UAL R EVIE W 2 02 0/ 21 29Apprenticeships Health & safety
Our apprenticeship programmes Southern Co-op continues to invest in health and safety.
have continued to be popular Regular training and coaching are delivered and a suite
with colleagues looking to gain of policies and processes continue to be developed to
new skills and qualifications “on help create a safe and healthy environment for the benefit
the job”. of our colleagues, customers and members. Despite the
measures we have in place to provide a safe and healthy
As we began the new financial place to work, accidents still occur. The number of colleague
year, 72 colleagues were accidents has decreased year on year, as have the number
studying for an apprenticeship of reportable incidents (i.e. those we are required to report
qualification. During 2020, to the health and safety executive). The colleague absence
the apprenticeship offer was rate (which includes absence for general illnesses and
extended to provide retail Gemma Greeman injuries unrelated to accidents at work) has increased year
customer service assistants Apprentice of the Year on year. This figure does not include absence within the
with the opportunity to study Cobra Coffee business.
towards a level 2 retail qualification. 16 colleagues are now
enrolled on this new programme.
Also in 2020, 19 colleagues from Retail and Lakeside completed an
apprenticeship qualification; seven of whom completed their CMI Staff injury 2020-21: 377 employee accidents,
Level 5 Management & Leadership qualification with six achieving a Photo taken pre-pandemic
of which 4 were reportable
distinction and one receiving an award for “Apprentice of the Year”.
2019-20: 449 employee accidents, of which 1
5 were reportable
The Academy – Training & Development
At the start of 2020, 72 Absence rate 2020-21: 5.65 days lost per colleague
As bringing people together was not an option this year, the
colleagues were undertaking an 2019-20: 5.39 days lost per colleague Academy team had the opportunity to find new and different
ways to provide colleagues with the skills and knowledge
apprenticeship qualification
they need to do their jobs.
We redesigned all compliance, legal and management
training programmes, transforming them from full-day
classroom workshops, to bite-sized, interactive virtual training
sessions, and these launched to Retail in September 2020.
To facilitate this new approach, we made significant
Jessica Hockridge
investment in technology, providing a Chromebook to each MEL2 certificate presented by Nigel Comer, Area Manager
of our food stores, meaning colleagues are able to continue
their learning journey online, without leaving their store. We
have delivered 87 virtual sessions to over 350 colleagues
and feedback on the new format has been extremely positive;
96% of the colleagues surveyed said they would recommend
the new style of training to others.
Management essentials level 2 (MEL2) is our development
programme to support duty managers who aspire to move
into a store manager role. We have delivered two new online
programmes in 2020 to 10 colleagues, all of whom have
graduated from the programme.
In 2021, we will make further investment in learning
technology and launch an online booking system to provide
87 virtual training managers and colleagues with a simpler way to view and
Oliver Levins
Certificate being presented by Pete Raynor, Area Manager
sessions delivered enrol themselves onto a programme.
to 350 colleagues
this year of the colleagues
surveyed said they
96% would recommend the
new style of training
to others.
30 S O U T H E RN C O -O P A NN UA L R E V I E W 2 0 2 0 / 2 1 SO UT HER N CO - O P AN N UAL R EVIE W 2 02 0/ 21 31We have also made progress in our
political lobbying work this year:
In September, we joined with 20 major British retailers in a
letter printed in The Sunday Times to the prime minister to
ask him to provide effective legal protection for shop workers
As an employer of over 4,000 colleagues, we strongly believe in the face of increasing levels of abuse and violence.
that all colleagues have the right to work in a safe environment
free from harm and the fear of harm. The most pressing At the same time, emails were sent to all 79 MPs in our area
concern is the increasing number of crimes that include the with a video highlighting the current challenges and asking
use of violence and/or weapons. them to support Alex Norris’ private member’s bill. This video
was also shared internally and on social media to encourage
This reflects a national issue that is impacting all retailers, but others to sign the petition. The video was viewed at least
we want to do everything we can to protect our colleagues. 16,500 times on Twitter and 55,000 times on Facebook.
Our Protecting our People programme launched in April 2019
aims to tackle this issue on a number of fronts, from providing In December, we collaborated with Sussex Police Crime
security equipment in stores, to working with local charity Commission (PCC) in the #KeepingChristmasKind campaign.
groups in our communities who address the root causes of As the national lead for business crime for PCCs, Katie
crime such as drug or alcohol abuse, as well as carrying out Bourne’s office ran the campaign across the country and
ongoing political lobbying to raise awareness of this type of it was a huge success. We helped to fund this and also
crime and the impacts on individuals and communities. put forward our Hove store manager, Steve, to share his
Developing our ‘Remote Management’ This year we have: personal story.
capability
• Reviewed all retail safety policies and procedures and made
With the vast majority of our Lakeside colleagues working at changes to help colleagues protect themselves
home during 2020, we identified a need to develop new and • Completed the rollout of CCTV to all funeral homes
different skills to enable managers to lead their teams effectively • Established and implemented the critical incident support
while working remotely. In August, a series of new interventions (CIS) practitioner response to serious incidents across the
were launched for managers, allowing them to learn and business
practice the skills required to manage teams in an increasingly • Piloted a new training programme for front-line
digital world. Virtual training sessions included an introduction Diversity & inclusion colleagues. Full launch in 2021.
to remote management, conducting performance appraisals in a
remote world and in January 2021, a third module was launched, There is much written about the benefits of organisational
running effective meetings. diversity; broader thinking capacity, increased productivity
and harnessing different perspectives to deliver business
Talent programmes objectives. It can also create great places to work, as
colleagues from different cultures and with different
Our second Future Leaders programme (launched in spring characteristics come together, share skills, experiences and
2018) concluded at the end of 2020. Four of our most senior personal goals to provide a rich and interesting workplace.
female managers from Marketing, Business Solutions, HR, We’re committed to continuing to develop a culture of
and Corporate Affairs completed the two-year programme in diversity, openness and inclusivity, and in 2020, using Business
conjunction with the University of Southampton. in the Community’s (BITC) Responsible Business Tracker
benchmarking and recommendations, we developed a three-
A series of workshops and executive coaching enabled year programme of activity aimed at creating a more diverse
participants to develop knowledge and skills across a range of workforce and a culture of belonging for all. To lead this
subjects including strategic leadership, business development, agenda, in autumn 2020, a diversity & inclusion manager was
organisation culture and relationship management. appointed.
In November, in partnership with BITC, we signed up to the
Race at Work Charter pledging our commitment to promote
race equality in the workplace. We will be launching a number
of activities throughout 2021 to support this campaign,
including ethnicity pay gap reporting.
We are keen to reduce barriers to work for disadvantaged
As an employer of over 4,000 groups and to ensure good jobs are accessible to all. Given
the specific difficulties faced by young people trying to access
colleagues, we strongly believe work, we were approved in January 2021 to support the
government’s Kickstart scheme. The scheme aims to provide
that all colleagues have the right paid work placements for young people in our communities
to work in a safe environment free who are considered at risk of becoming long-term
unemployed. In 2021, we want to offer more than 75 work
from harm and the fear of harm placements alongside a structured employability programme
to young people, and give them relevant experience and skills
to help them to move into permanent employment.
32 S O U T H E RN C O -O P A NN UA L R E V I E W 2 0 2 0 / 2 1 SO UT HER N CO - O P AN N UAL R EVIE W 2 02 0/ 21 33Gemma Lacey
Sustainability &
Communications Director
We’re committed to supporting delivery
of the United Nation’s Sustainable
Development Goals (SDGs), described
as the world’s ‘to-do list’ and focused on
addressing the world’s biggest challenges.
They are a universal call to action to end poverty, protect our planet and
ensure that everyone can enjoy peace and prosperity, and will only be
achieved if businesses, like ours, get behind them.
As mentioned at the start of this report, we’ve reviewed each goal
alongside our business strategy, considering a range of factors. We have
identified three where we believe we can have the greatest impact. Our
supporting sustainability commitments and targets form an integral part
of our plan.
34 S O U T H E RN C O -O P A NN UA L R E V I E W 2 0 2 0 / 2 1 SO UT HER N CO - O P AN N UAL R EVIE W 2 02 0/ 21 35CLIMATE ACTION Measuring impact
In 2020, our direct absolute CO2e (carbon dioxide equivalent)
are aligned with those of Co-op Group. Although a smaller
percentage, the same applies to our franchise relationship with
Starbucks.
emissions (Scope 1 and 2) were 14,482 tonnes – a decrease
of 23% compared with the previous year (18,766 tonnes). This However, there are opportunities for us to influence smaller
reduction has been driven by an overall decrease in energy aspects of these emissions, so in 2021, we will be identifying
Climate change is one of the most pressing stay within in order to limit the severity of the impacts of climate consumption, ongoing refrigeration and gas replacement work activity that could support reductions in these areas.
challenges our world faces today. Our planet change. They have been validated by the Science Based and lower company car usage. There was a slight increase
Targets Initiative, a partnership between leading environmental in service vehicle emissions due to the addition of our home
is warming, mainly due to greenhouse gas organisations that determines the emissions businesses must
emissions generated by humans, and if we are to delivery service.
cut to prevent the worst impacts of climate change. Indirect (Scope 3) GHG emissions
avoid the worst consequences of climate change, Our carbon intensity, which measures our emissions relative
They also provide a vital first step on a longer-term pathway 60%
we need to act now. to the size of our business and estate, decreased from 40.18
to net-zero carbon, whereby we balance the carbon we emit tonnes for every £1m of sales in 2019 to 29.56 tonnes in 2020
with carbon that can be sequestered, (sunk or stored) through 50%
Southern Co-op, as part of its commitment to supporting the – a 26% decrease.
UN Sustainable Development Goals and Goal 13: Climate natural or technological processes. 40%
% of Scope
Action, has unveiled two new science-based targets to reduce Our total energy consumption (electricity and gas) was 39.3
its greenhouse gas (GHG) emissions. Work is currently underway to deliver a supporting climate million kWh in 2020, down 9% on 2019 (43.1 million kWh). Retail 30%
action roadmap which identifies the areas where we need to energy consumption was 33.6 million kWh in 2020, down 7%
focus investment and activity to achieve our climate ambition. 20%
Defining our climate ambition on 2019 (36.2 million kWh). Retail energy efficiency was 65.54
This builds on initiatives already undertaken to reduce our kWh per sq ft trading area, up slightly from 63.94 in 2019.
carbon footprint, such as the installation of LED lighting across 10%
With the support of an external climate agency, and under
our estate, movement sensors to control lighting in stockrooms
the stewardship of our Climate Action Group, chaired by our
and colleague areas, airflow technology or doors for Indirect (Scope 3) emissions 0%
Chief Executive, we’ve been looking at how we can scale and
refrigeration, and solar photovoltaic panels at eight locations.
Goods & services purchased (we sell)
Goods & service purchased (we use within our business)
Fuel and energy related activities
Supplier transportation & distribution
Waste generated in operations
Business travel
Colleague commuting
Customer travel to our food stores/other businesses
Use of fuel sold at petrol stations
End of life treatment of sold products
accelerate our activity in this area and define our climate ambition. Scope 3 emissions are the indirect greenhouse gas
The first target – to reduce absolute greenhouse gas emissions (GHG) emissions associated with our supply chain and the
by 50% by 2030 from a 2019 base – was announced to We have now launched two new targets: manufacture or development of our products and services
members at our AGM in October 2020. This targets our Scope (everything before point of sale) and those associated with
1&2 emissions, which fall under our direct operational control our customers and their use of our products (after the point of
and influence, in other words, the electricity, gas and fuel we use sale).
and those emissions associated with our refrigeration.
Reduce the absolute greenhouse
In 2020, we worked with our climate consultancy, to better
We have now also committed to reduce the absolute GHG gas emissions associated with our understand the footprint of these indirect emissions, which
emissions (known as Scope 3) associated with our managed direct operations by 50% by 2030 we were aware would be far larger than those associated with
trading businesses, by 17% by 2030 compared to 2019. This our operations. Although more challenging to address, as they
includes those emissions related to our supply chain and the Reduce the indirect absolute are not within our operational control, we have set a target to
products we sell and use within our business. reduce these emissions.
greenhouse gas emissions, from
Both of these targets are aligned to the latest science, and they our managed trading businesses, Over 50% of these emissions relate to the goods we purchase
support what is required globally to limit global warming to 1.50C by 17% by 2030 through our buying arrangement with Federal Retail Trading
– this is the safer temperature limit scientists say we need to Services. So we will need to ensure our own carbon priorities
*excludes Category 14 emissions associated with our Welcome franchisees
and Category 15 emissions associated with our investment properties.
36 S O U T H E RN C O -O P A NN UA L R E V I E W 2 0 2 0 / 2 1 SO UT HER N CO - O P AN N UAL R EVIE W 2 02 0/ 21 37You can also read
