Co-operatives reward customer loyalty
Mr Kojima’s grocery store, near Tokyo’s fish market, has been in business since his grandfather
started it almost 100 years ago.
His store is part of a group of co-operatives, called Zen Nippon Shokuhin, which has nearly 2000
small stores. The co-operatives plan to introduce a loyalty card which rewards customers who use
the stores regularly. They do this by giving special offers only to loyalty card holders.
These stores have enjoyed a great deal of success in recent years. Sales have increased by
20%. Customers like the personal service they receive from a local store. Sales in Japanese
supermarkets, in contrast, have fallen for fourteen years in a row.
Some economists, however, consider small stores such as Mr Kojima’s to be rather outdated.
They also think the inefficiency of these small stores may be one possible cause of the low level of
productivity of Japan’s service sector
Describe two features of a co-operative
Candidates could mention:
• the idea of working together to share profits
• according to the amount that consumers had spent
• the co-operative exists for the benefit of its members
• the owners of a co-operative are the members
• this gives them voting rights
• but each member only has one vote
• many co-operatives stress the importance of social principles
• usually have limited liability
1 mark for a basic description of each feature and 1 mark for a development of the description of each feature.
Note: allow descriptions of different types of co-operatives.
Note: maximum of 4 marks.