During the 1830s and 40s poor living and working conditions, low wage rates and large-scale unemployment in the Lancashire town of Rochdale, coupled with a failed Flannel Weavers' strike resulted in twenty eight weavers forming a group which aimed, through collective and co-operative means to improve the lives of working people in Rochdale.
Following a year of saving capital and drawing up a set of basic rules and principles the group became The Equitable Pioneers of Rochdale, managed at first by Charles Howarth. Their first aim was to open a shop which would sell basic necessities at an affordable price and of a high quality. With the £28 that they had collectively saved over the past year the group rented a property on Toad Lane in Rochdale and on 21 December 1844 began trading. At first the shop only sold five basic items: butter, flour, sugar, oatmeal and candles. However despite many difficulties the shop grew hugely in popularity and expanded very quickly.
The creation of a co-operative shop was only the first stage of a programme that the original Pioneers intended to involve co-operatively owned forms of education, social and cultural provision and cultivation. All of these ideas were aimed at enabling working and poor people to maintain a decent standard of living and quality of life.
The shop traded using the idea that everyone who purchased from the shop had a direct share in the business and its profit. The system differed from most other co-operative businesses that had preceded it because it did not offer equal-sized shares and returns for each customer but instead the customer owned a share that was proportionate to the amount that they had spent in the shop. It is this system of co-operative ownership that was the first successful example of what has become the most popular and common co-operative system throughout Britain and the western world.