Media release: Channel Islands Coop update on Members Dividend
The Channel Islands Co-operative Society (CI Coop) says a proposition aligned with Member rules, allowing the Board to determine whether to pay no dividend or reduce dividend rates, will be presented at its annual members meeting in May.
The Dividend is recommended by the Board and agreed by Members at the Annual Members Meeting held in May. The level of Dividend is based on the trading performance of the business over the previous financial year. Members earn an estimated dividend reward every time they make a qualifying purchase in a CI Coop outlet by registering their Share Number at the checkout.
The food retail sector has experienced continuous pressure since Brexit and Covid-19, with significant ongoing strain on global supply chains, raw ingredient prices, energy costs and rising inflation. Despite these factors, the CI Coop has absorbed much of the impact of relentless cost inflation and resisted increasing prices on many everyday items to protect its Members during a period where many are struggling to manage household budgets.
Mark Cox, CEO at the CI Coop said, “We are acutely aware of the financial stress our customers are experiencing in the current economic climate and we are investing in prices to mitigate the impact as much as we can. Our business has not been immune, however to the consequences of these global issues and in particular rising costs.
“The Members’ Dividend is a reward scheme that is directly dependent on our financial performance, and that has been affected by extremely challenging market conditions over the past few years. The Board will put forward a proposal for the 2023 Dividend at our Annual Members Meeting and it will be for our members to vote whether they approve it.”
Mr Cox emphasised that the CI Coop is striving for efficiencies and savings wherever it can from operations and continues to invest in the customer experience through a store refurbishment programme and the introduction of new technology while maintaining its commitment to support local producers and community organisations.
What is happening to the Dividend?
Dividend is not guaranteed and every year the amount payable is recommended by the Board and approved by members at the Annual Members Meeting in May.
A proposition aligned with Member rules, allowing the Board to determine whether to pay no dividend or reduce dividend rates, will be presented at the Annual Members Meeting in May.
What will happen to my unclaimed Dividend from previous years?
Previous years' Dividend has already been paid to Members in their share account and can be seen under 'Current Balance' in the Member Portal. The decision around whether a Dividend will be paid in May 2024 relates solely to the financial year ending 14 January 2024.
Estimated Dividend is calculated throughout the financial year however may only be paid when CI Coop achieves net profits from all its activities. The Board will consider the financial results, recommend the payment of a Dividend and the Members then vote on the recommendation proposed. Our Member rules at Chapter 11, section 16 sets out how profits of CI Coop may be applied.
Where can I view my available balance?
In your Member Portal, your 'Current Balance' is available for you to withdraw. The 'Estimated Dividend Last Year' is subject to approval by The Board and Members at the AMM in May.
What if I don’t want to accept the proposed Dividend?
You will be asked to vote for the proposal at the AMM in May, to accept it or reject it. But rejecting it doesn’t mean a better offer will be made. The Board has to decide what the business can afford to pay, and the proposal will be the best they can offer in the financial and economic circumstances.
Who has the final say on the Dividend?
Our Members own the Channel Islands Co-operative Society and will vote to accept the proposed Dividend at the AMM. The Board makes the ultimate decision about what is a sustainable level of Dividend to propose based on commercial considerations.
Without the Dividend, what’s the point of being a Member?
There is every point. Membership is so much more than the Dividend. Being a Shareholder keeps CI Coop in local ownership. There are more ways we thank our Members for their loyalty. We do this through more and better price promotions, giving back real value and money in the pocket of our Members every day. CI Coop is also a major supporter of local charities and community causes and being a Member means you are part of that philanthropy – you are indirectly giving back to your community.
Will the Coop be paying bonuses?
All bonuses have been cancelled; this decision affects everyone in the business. Given the economic uncertainties, the decision was made to prioritise the financial stability and sustainability of CI Coop to safeguard jobs and maintain ongoing operations.
Why have you been spending on branding and stores?
Our Members are our Society. Everything we do is for their benefit. We have invested in modernising our stores, including pharmacy, installing new technology and consolidating all our stores under one brand. Above all we have been investing consistently in price. The number one worry for our customers at the moment is the cost of living and making ends meet. We are driving down the prices in our stores to help families who need every penny saved.
What will happen to the money in my Share A or Share B account?
The money in your Share A or Share B account is unaffected by any decisions about Member Dividend. It is fully secure and will continue to earn interest.
Why are you doing this?
The Members’ Dividend is a reward scheme that is directly dependent on our financial performance, and that has been affected by the extremely challenging market conditions of the past few years. National and global events have significantly impacted our trading and operational capability. Rising inflation, Brexit, the pandemic, conflict in Ukraine and the Middle East, and the consequent impact on supply chains and operating costs have led to a reduction in profits for the business.
Given the economic uncertainties, the decision has been made to prioritise the financial stability and sustainability of your CI Coop to safeguard jobs, maintain ongoing operations and support our growth strategy.
Will the Dividend go back up?
We are looking at several options for the future. As well as investing in our product and prices, we will continue to make a positive impact through innovation, using technology to make our business more efficient and sustainable, which is good for you, good for our islands and good for our communities. Our priority is to return to better financial performance, which will enable us to reward our loyal customers appropriately.
Who can I speak to about this?
We have a dedicated Membership Team who will be happy to answer any additional questions or concerns you might have. Please get in touch with them by phone on 01534 879822 or 01481 231155 and ask to speak to our customer relations team or by email email@example.com.