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In November 2018, SNCF CEO Dolly Goh, attending as a speaker for the Business Council of Co-operatives and Mutuals (BCCM) Summit, was given the opportunity to visit The Community Co-operative Store, Australia. What hit home about the visit were:

  1. Very proud to be identified and known as a co-op in all touchpoints
  2. Embracing members, listening and reinventing itself to serve the needs of its members and the society (i.e. the local suppliers, consumers, offering employment, developing the young) at competitive pricing
  3. Making reasonable profits to deliver its social cause, serving its members and community with quality and competitively priced products and services
  4. A co-operative that its members (every member/owner has an equal voice) and the society that they serve are very proud of as they see themselves as owners and beneficiaries of the co-operative


The Co-operator is glad to have the opportunity to interview Mr Neil Retallick, Chief Executive, The Community Co-operative Store by email for this issue.

 

In the co-operative model, the relationship between the owners and management is much closer, and every owner has an equal voice. More democratic, more purpose-driven and more transparent – a winning combination that ensures positive outcomes for all stakeholders.

- Mr Neil Retallick, Chief Executive, The Community Co-operative Store (Nuriootpa) Limited in South Australia


One neighbourhood store. A thwarted succession plan. A group of decisive businessmen. All converged to precipitate the genesis of the Nuriootpa Co-operative ("The Co-op") 75 years ago.

Today, The Co-op is a thriving retail enterprise serving the community in Barossa region, South Australia. Its network comprises a large supermarket (4,855 square metres) and nine specialty stores, all located in Nuriootpa, a small town whose name means “meeting place” in the aboriginal language.

Neil Retallick Nuriootpa South Australia"As of the last financial year, our combined turnover is in excess of AUD60 million. Growth in sales revenue over the years is a result of The Co-op offering to our members the products and services they want. The credit must go to all those who have worked at The Co-op over the last 75 years, building up the network of stores to what it is today," said CEO Neil Retallick.

The origins of The Co-op could be traced back to the 1930s when Harold and Rose Sheard opened a general goods store in Nuriootpa. They had planned to hand over the store to their son. Unfortunately, he was killed in the War. The couple decided to sell the business. Anxious about the prospects of the store disappearing from the town, a group of local businessmen bought it over. In 1944, the business was converted to a co-operative and 7,500 shares were sold at a pound apiece. That first store was the seed from where the business took off.

butcher nuriootpa south australia

The benefits of The Co-op operations are far-reaching. The convenience it provides to members is unrivalled even by Internet shopping. From food to hardware and electrical goods, toys to sporting equipment and apparel, residents in Barossa can purchase almost everything they need from the constellation of 10 shops in Nuriootpa, all within a radius of 300 metres.

"Due to our geographical location, online shopping is not entirely convenient. What takes two days to arrive if ordered in Sydney can take three weeks to arrive in Nuriootpa," Neil said, dispelling the popular notion of speed offered by online shopping.

The incentives it provides to members are robust. In a competitive retail industry where customer loyalty programmes are all par for the course, The Co-op has managed to hold its own.

"There is a huge difference between a loyalty programme and what we do in the co-operative. In Australia, loyalty programmes provide an incentive that works out to be around a 3% discount in the long term. Usually, it is an accumulation model; the benefits are not immediate, and the wait can be long for the rewards to materialise. Retailers offer these programmes for two main reasons. First, to obtain an email address for follow-up engagement with the customer. Second, and more importantly, retailers want to track the shopping behaviour of the customer so that they can design personalised promotions that will appeal to her or him," Neil clarified.

"Membership of a co-operative ought to be more compelling than the 3% discount, while still being able to provide the same two benefits I mentioned. Granted, membership of The Co-op is not free. But the AUD2 membership fee can be recouped through the discounts on offer, in just one visit to the supermarket," he added.

Besides providing the tangible benefits, The Co-op satisfies the aspirations of those wishing to be associated with the Barossa identity, building and strengthening it. When shopping at The Co-op, members know that they are helping the community of which they are a part.

fruits nuriootpa south australia

"We reach out to the local community through three pillars - economically, culturally and health. The Co-op employs local residents, paying out more than AUD10 million in wages a year. We are the largest employer in the region of people under the age of 25. Through intentional procurement policy, we support local businesses, about 120 food suppliers and services providers. We set aside funds to support local cultural organisations; each year, we give out more than AUD100,000 to local cultural organisations. A new programme, slated to launch this year, seeks to help our members make better health choices when shopping at The Co-op," Neil elaborated.

An example of The Co-op 'going native' is the way the supermarket protects and promotes the local reputation for gourmet foods. Local producers are highlighted and a ‘Barossa Larder’ area has been specially built to emphasise the quality produce. In addition, the supermarket invests in a thermostatically-controlled Cheese Room, signifying its commitment to the many cheesemakers in the Barossa region.

delicatessen nuriootpa south australia

The growth momentum of the past 75 years is not about to slow down. If anything, it has been revved up to keep apace with the needs of a new generation of members. Over the last five years, The Co-op has invested substantially to rebuild its infrastructure, to create more retail space and to modernise the built structures. The hardware store underwent expansion. It is much larger now and is better equipped to serve local building and construction contractors, besides retail customers. The supermarket emerged to be stunning from a makeover - with one wall, made of glass, rising to seven metres high - while the redesigned shopping centre has been nominated for international design awards.


"These were courageous decisions made, aimed to position The Co-op to be the preferred destination for the local community for many years to come. Our challenge is to keep our focus on our customers - every day our offers are evolving as we listen to our customers. Every day is an opportunity to get better. This is an exciting journey we are on," Neil said. "There are around 38,000 people living in the Barossa region. Our membership stands at about 24,000 currently. There is a terrific opportunity for our co-op to increase its reach and expand membership."

There is another reason for being upbeat. With the co-operative model gaining popularity in Australia, the Government has resolved to provide more clarity and guidance to operators.

"A key issue was, and still is, the ability for co-operatives to raise funds from entities outside its membership base without prejudicing their co-operative status. Legislation will be introduced to the Federal Parliament this year to normalise the co-operative structure. This will provide co-operatives with an opportunity for growth not previously available," Neil said.

 


 

Neil on Running a Retail Co-operative

Tips on running a retail co-operative:

  • Focus on profit, not revenue. Profit takes into account costs and provides a better gauge for financial efficiency.
  • Engage more in competitive pricing, instead of cheap pricing. Ask how we can value-add to our 'brand' in terms of product quality and service. Be prepared to educate customers and change mindsets.
  • In pursuing business objectives, do not forget the co-operative's reason for existence. Take time to talk and listen to members for they keep us grounded.


Learning Tips:

  • The co-operative values of self and mutual help, as well as principles of democracy and equality are real and empowering values to help co-operatives to forge ahead
  • Co-operatives exist to benefit members and help to improve lives in communities
  • Sustainable in order to be a force of good

coop logo green text inverse

Singapore National Co-operative Federation
510 Thomson Road #12-02
SLF Building, Singapore 298135
Email: [email protected]
Tel (65) 6602 0747, Fax (65) 6259 9577

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