The Entertainer’s move to hand over ownership to its employees could come with secondary benefits: journalists love cooperatives, writes Guto Hunkin
The news that The Entertainer, one of the UK’s largest toy retailers, is handing ownership over to its employees, is the latest in a growing trend towards mutuality in business. The Labour government has pledged to double the size of the sector, while the UN has designated 2025 as the International Year of Co-operatives.
The Entertainer is the most high-profile recent example, but UK businesses as diverse as clothing brand Lucy & Yak and vehicle supplier David Spears Commercials have also recently made the change into employee ownership.
There are lots of motives for why companies might want to move to this model. But our Ipsos research suggests there are particularly strong reputational reasons to do so.
Journalists love cooperatives
Twice a year, we poll a wide range of British business journalists to understand their perspectives on key issues for company leaders. Our findings show that member-owned businesses hold a significant reputational advantage over publicly traded ones.
These aren’t small differences either. Journalists are twice as likely to view member-owned organisations as good employers and socially responsible, compared to their shareholder-owned counterparts. This “mutual advantage” also extends to customer relations, with member-owned businesses perceived as more likely to deliver better value for money and superior customer service.
And it’s not just journalists who see the benefits, but politicians too. Parliamentarians consistently rank John Lewis, Nationwide and The Co-Operative Group among the best reputations of more than 40 major UK organisations tracked by Ipsos, citing the ethics, customer-centricity and social responsibility demonstrated by one leading mutual.
Will The Entertainer benefit?
The Entertainer’s move aligns with a key finding from our research: the importance of employee investment in a company’s success. The survey respondents consistently emphasised that when employees have a stake in the business, it fosters loyalty and a sense of collective purpose. Staff in member-owned businesses often view the company as part of their long-term plan, potentially leading to higher investment ratios and enhanced customer service.
As The Entertainer embarks on this new chapter, it will serve as a real-world test case for many of the theories the research has uncovered. Can the business display greater transparency and accountability, and develop long-term strategies? Will employee satisfaction and customer service levels improve?
Of particular interest will be how the company balances profitability with the ethos of mutuality. Journalists perceive a trade-off between strong returns and employee ownership, indicating that The Entertainer may need to navigate carefully to maintain financial health, while leveraging the benefits of increased employee engagement.
Guto Hunkin is associate insights director in corporate reputation at Ipsos