Alongside its annual results statement yesterday that showed the business had suffered a fall in sales and profit, partly due to last year’s supply chain issues, the Co-op warned of further tough times ahead.
The society noted that it was continuing to face problems with food supplies alongside surging inflation. Shirine Khoury-Haq, who is due to take over the CEO role from Steve Murrells in May, stressed that the problems were not just being prompted by the war in Ukraine, which has driven up the price of energy and affected supplies of wheat and edible oils.
She pointed to problems with heavy rainfall and flooding in Spain that had hit supplies of vegetables, with the Co-op forced to source elsewhere or offer alternatives because of shortages.
Khoury-Haq stressed that the society had outperformed the grocery market in recent months and was gaining share. However, the group expects its food business to “face continued challenges during the year” amid “inflationary pressures and the economic uncertainty facing customers”.
Allan Leighton, the chair of the Co-op, noted that companies were facing rising costs across the board. “I don’t think any of us have seen so much disruption in the supply chain, not just in terms of the ability of suppliers to supply but in terms of what’s happening to ingredients,” he said. “There’s not a single cost I think in any business that isn’t going up.”
Leighton concluded: “The economic headwinds look stark and will be tricky to navigate but through our continued planned strategic investments our Co-op is well placed to ride out the storm and prosper beyond.”
