In 1933, CWS formed a retail division tasked with taking over failing retail consumer co-operatives, and setting up shop in new areas. This division was demerged to form Co-operative Retail Services during 1957. The demerger was prompted by complications with CWS's democratic governance: it was becoming a larger retailer in its own right but it was a secondary co-operative, owned by other co-operatives, meaning the retail division's customers had little representation on the board.