What is the ‘dividend’?

Its often the first thing older visitors say..reeling off a four or five digit number and saying ..’that’s my Grandma’s divi’.

The word was also used, particularly in the North West to mean someone behaving in a stupid way. Particularly in Liverpool (originally part of Lancashire), the claim, “he’s a right divvy” comes from the idea of the dividend being a small share of the total (in other words..”less than the full shilling”).

One of the ways a co-operative business was different to others was the rules developed by the Rochdale Pioneers as part of the ‘law’ of a modern co-operative. One rule was that members would receive a dividend (a divide or a share of the profits). This encouraged them to purchase more goods with the co-op in order to receive a greater share of profits on ‘divi – day’ and receive it as cash or put it towards funding a good cause - such as the building of an orphanage.

Today this is called ‘economic participation’ and is part of the modern principles developed by the International Co-operative Alliance formed in 1895 to bring international co-ops together. In late September 1995, the ICA met in Manchester to launch the ‘statement of co-operative identity’ which was based on the way the Pioneers had started their venture in the 19th Century.

In the Pioneers shop, purchases were recorded in a book, but as membership grew, names had to be replaced by numbers to make the book-keeping easier. Several times a year, the profits would be calculated and shared out among the members according to how many purchases they had made from the society store and many people used this as a from of saving for big expenses such as furniture for a new home, or a wedding.

Co-op Dividend tokens were small discs with a monetary value and were usually made from tinned iron or zinc. They were introduced in the mid-19th century and kept until divi day which might be twice a year or every quarter to be redeemed for cash. For example, If the dividend was declared at 2 shillings in the pound then £5 in purchases (represented by £5 in tokens) would result in the customer getting 10 shillings.

Sometimes members might be tempted to hold onto their tokens hoping for a better rate of dividend next time, but it wasn’t guaranteed and could affect the balance sheets if too many people did it. If a low dividend of 3% was declared and two thirds of the members withheld their checks until 6% was declared, the society would end up paying double on checks that should have been redeemed at 3%.

There was another risk in the use of metal tokens, in that some of the higher value tokens might be forged which could cause societies to struggle financially. As a result, some societies stopped using metal tokens in exchange for a paper counterfoil system and by the 20th century plastic tokens had come into use, as these were harder to forge or alter.

In our museum collections we have a wide range of tokens used by societies all over the country. Some of them cheaply cast and very plain; others highly decorative and incorporating symbols related to the co-operative movement or the local area. Although most of the smaller societies no longer exist, or were merged with larger regional co-ops, they give a flavour of the way people shopped on a ‘micro-level’ at a store within the heart of the community.

The economic impact of Covid-19 has resulted in more people supporting businesses in communities, and trying to shop more often on a ‘hyper local’ level where possible. This brings to mind the fact that the trend to supermarket shopping changed relatively recently in the late 1970’s with the rise of car ownership. Changing habits meant changing the way the dividend operated and was advertised as a perk of being a co-op member.

A short piece of film footage from our archive shows the ‘modern divi’ and how it offers the discerning customer savings on food shopping in 1967. 

As a result of some of the growing inequalities made worse by Covid-19; modern members of the Co-op Group and other regional co-ops can use their profit share to claim offers and discounts, choose to donate it to community causes or even gift it to other people affected by the pandemic and food sharing schemes. Today, just as in the 19th century, getting something back as a member remains closely tied to decisions about how we use our spending power to benefit our communities as well as ourselves.