Out-of-touch Co-operative Group seeks redemption with new campaign

Company has launched an online nationwide poll as it seeks to move on from Flowers scandal

(Getty Images)

Scandal-hit Co-operative Group has admitted it “lost touch” with its customers and the community, kicking off a campaign to give people a say in the future of the troubled mutual.

The company has launched an online nationwide poll as it seeks to move on from a dismal 2013 following financial woes at its banking arm and the scandal involving its former bank chairman Paul Flowers.

Group chief executive Euan Sutherland pledged to listen and act on views of those who take part in the survey, including customers, members, staff and the wider public.

He said: "In recent years The Co-operative Group has lost touch with its customers and members and with the communities in which it operates - we haven't been listening."

He added: "We will be asking people up and down the country what they believe The Co-operative should really stand for.

"This is an unprecedented move for an organisation of the size and the scale of The Co-operative and the results will feed directly into our wider review of strategy and purpose."

The survey - available at www.haveyoursay.coop - asks a broad range of questions, from how to improve its goods and services to thorny issues such as whether the Co-op should make political donations.

Lord Myners, the former City minister who has been tasked with leading a review of the Co-op's governance structure, revealed last month that the group's controversial £1 million annual donation to the Labour Party was to be slashed as it looks to save money.

There have been questions over Labour's links to disgraced former Co-op Bank chairman Mr Flowers, who was a Labour councillor, and has been embroiled in scandal after he was arrested as part of a drugs investigation.

Mr Sutherland said the group would consider axing political donations completely if the vast majority of those quizzed in the survey said it should.

He said: "We are genuinely opening ourselves up to listen. If we get an overwhelming response that says customers don't see the link between funding a political party, it will be impossible for us not to take action and ignore it."

The survey will be open from today until March 24 and the results will be published at the group's annual meeting in May.

The food-to-funerals group is preparing to reveal results for 2013 at the end of next month - figures that will be "pretty ugly" due to the rescue of its bank arm, according to Mr Sutherland.

Its banking business has fallen under the control of bondholders, including US hedge funds, as part of a refinancing to fill a £1.5 billion hole in its balance sheet.

The group now faces a raft of inquiries into what went wrong at the bank, with regulators recently launching formal investigations that could see former senior managers fined or banned from working in the industry.

Mr Sutherland said the banking business had started to halt the stream of current account customers switching to rivals after its battered reputation led to a sharp increase in those quitting the group at the end of last year.

"It's in a much more stable position as we go into 2014," he said.

Additional reporting agencies