Company

6 January 2021

The timeless success of the cooperative model

When it comes to cooperatives, Germany leads the way in Europe, and the REWE Group is not just the oldest but also the most successful of them all. The Group’s regional cooperatives are run by 1,800 retailers who operate approximately 2,200 REWE and Nahkauf convenience stores between them, with numbers rising all the time and 81 percent of retailers managing a single store. REWE’s ongoing development is informed by the knowledge and experience of a 300-strong team of specialist retailers (TEK).

One of the cooperative movement’s most knowledgeable experts is Thomas Nonn, Executive Board Member for Independent Retail and Cooperative. He represents the interests of independent retailers both within the group and at national and European levels. In this interview, he explains why cooperatives are the best business model and what opportunities the REWE Group offers to business owners.

Mr Nonn, what accounts for the timeless nature of the cooperative organisational model?

Thomas Nonn: The cooperative model has always been ahead of its time. Choosing a business model that supports independent entrepreneurship demonstrates a high degree of responsibility. Many of the movement’s ideas have always been and will continue to be relevant. Sustainability, for instance, is in the cooperative movement’s DNA. Independent livelihoods that are maintained from generation to generation.

So there is no need for cooperatives to hide behind capital market-oriented companies?

Thomas Nonn: On the contrary, when compared to capital market-oriented companies, cooperatives are the better option because they fulfil an important social mission. This applies not only to the banking, agriculture and retail sectors, but also particularly to the German housing market. In Germany, around 2.2 million properties are let out by cooperative housing associations on terms that are not available on the open market. A further advantage is that cooperatives are democratically managed and regulated. As owners, the members have their say on all the key matters and harness their expertise to shape to the future development of the business, as aspect that is unique to the cooperative business model.

What does this mean for the REWE Group?

Thomas Nonn: Our retailers are the heart of our cooperative; they benefit from all that the organisation has to offer while participating actively at the same time. As members of regional cooperatives, the retailers are involved in the key opinion-forming processes, either directly or through elected representatives. Some retailers contribute their experience and expertise as managers in the sales regions and are involved in the decision-making process. This ensures that the retailer perspective is incorporated into each transformation process, resulting in the best outcome for everyone.

When compared to capital market-oriented companies, cooperatives are the better option because they fulfil an important social mission.

Thomas Nonn, Executive Board Member
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Thomas Nonn, Executive Board Member

Doesn’t this make it difficult to reach strategic decisions?

Thomas Nonn: No. Because, when it comes to strategic decision-making, the management and shareholders are not accountable to anyone else, which allows them to take a stable, long-term approach without the need to respond to every little distraction along the way. That is a definite advantage. Alongside the necessary focus on economic success, the management can also promote other values, such as mutual trust and constructive collaboration. This can be seen in the retailers who share their experience and expertise over many decades as part of the specialist retailers’ team and the strategic committee meetings (SAS), which give retailers and management a platform for regular discussion at the regional and national level.

What are the challenges you face when seeking suitable candidates to join the REWE Group as independent retailers?

Thomas Nonn:

We receive a lot of applications, but the biggest challenge comes in matching a suitable candidate to a location. We therefore look favourably on those who are able to relocate. The amount of preparation required before becoming one of our independent retailers is an additional obstacle that can be frequently underestimated. We devise a tailored training plan for each applicant which varies in length and focus according to the individual’s prior knowledge and experience. If you would like to find out more, visit the REWE careers site (https://karriere.rewe.de/selbststaendigfor further details and information about the different cooperative models.

You represent the interests of independent retailers and cooperatives across several national and international associations. How compatible are your various roles?

Thomas Nonn:

My roles complement each other perfectly because, ultimately, everything I do is about establishing frameworks to ensure that independent retailers are supported by their organisations and can be as successful as possible. As president of Independent Retail Europe, I have the same aims as in my other roles: to do everything I can to establish the frameworks that will enable cooperatives and their members to achieve success in their business. Correcting misguided perceptions in the political and public spheres and promoting a better understanding of the work of cooperative business models in retail are both crucially important aspects of my role.

The REWE Local Partnership is a case in point. This sees our REWE retailers voluntarily committing to abide by guidelines promoting sustainable collaboration with local producers and suppliers. Retailers and producers have cooperated on equal terms for many years. It would have been unnecessary to introduce additional legal regulation against unfair trading practices in this instance because the Local Partnership has long provided farmers with a high degree of certainty and security in respect of order volumes, marketing and pricing.

REWE Group

From the very start, independent retailers have played a significant role in shaping REWE’s success. The REWE Group was formed in 1927 following the merger of 17 purchasing cooperatives and has therefore been based on the cooperative model since day one. Now as then, REWE’s guiding principles are influenced by this heritage. Independent retail is a mainstay of REWE’s culture.

Independent Retail Europe

Independent Retail Europe is a European umbrella organisation for groups of independent retailers in the food and non-food sectors. Its members are independent retail groups, independent retail associations and service organisations, including Conad, Edeka, Euronics, Expert, FCA, ICA, Intersport, Markant, REWE, Système U and Spar. In total, Independent Retail Europe represents more than 380,000 retailers.

Thomas Nonn

Executive Board Member

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Executive Board Member Thomas Nonn heads up the REWE Group’s Independent Retail division.

He was one of the architects of the ‘REWEformer’ project, which refocused attention onto REWE’s independent retailers and pushed for their involvement in decision-making processes. At cooperative association level, Nonn is also actively involved in the committee of the Mittelstandsverbund – ZGV e.V.

In addition, he has been the president of Independent Retail Europe since 2019. He is also a member of the council and board of directors of the DGRV (German Cooperative Confederation) and is active on the board of the Centre for Research into the Cooperative Movement at the University of Cologne and the governing body of the ADG (Academy of German Cooperatives) in Montabaur. Nonn is also on the board of the German Friedrich Wilhelm Raiffeisen Society.

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The cooperative model has always been ahead of its time. Choosing a business model that supports independent entrepreneurship demonstrates a high degree of responsibility.