People who would start co-ops are usually decent and don’t care about profits that much. They wouldn’t exploit their workers or other obvious strategies that would put profit more important than wellbeing.

All the companies that don’t care about this have much less costs. Thus the companies that don’t care about morality can offer lower prices than the co-ops, and since most customers care about that more than anything else, the co-ops are driven out of business much more often.