The Co-op Group has posted strong first-half results, buoyed by people shopping closer to home and eating out less during the pandemic.
The society’s total revenues over the six months to 4 July rose 7.6% to £5.8bn, driven by its core Food and Wholesale units. Group underlying operating profit doubled to £121m, whilst pre-tax profits were up 35% to £27m.
Revenue in its Food stores rose 5.2% to £3.9bn with an overall like-for-like increase of 8.8% boosted by a 9.9% hike in the second quarter. The Co-op highlighted that 1.7m new households shopped in its stores during the period with average basket size doubling as customers reduced visits.
Food underlying operating profit increased 46% to £175m, although reported profits were impacted by costs of £54m related to additional recruitment and safety measures during the crisis. It expects costs to total £97m in its full-year results.
Meanwhile, Nisa wholesale revenues climbed 13.9% to £801m, benefitting from local shopping in lockdown and range improvements via the Co-op own label offer. 304 new stores signed up to the group during the period.
Looking ahead, the retailer said is likely to face more intense competition in the coming months against the backdrop of a worsening economy. It is also planning for and dealing with further local lockdowns.
However, the Co-op stressed that it remains well positioned, with it recently resuming its store opening programme which will see £130m invested in opening 50 new stores and revamping another 100 outlets before the end of the year.
Steve Murrells, Chief Executive of the Co-op, said: “We are living in unprecedented times, but the response of our Co-op has been exceptional and I’m immensely proud of my 60,000 colleagues who’ve helped to feed and care for the nation during this difficult period.”
He added: “The coming months and years remain uncertain, and we know our own Co-op will not be immune to the pressures the recession brings to family budgets and to local and national economies.”
IGD Co-op Trade Briefing
Be the first to learn in detail about how Co-op is building its trade strategy around four core ‘missions’, at this year’s IGD Co-op Trade Briefing on 3rd November:
Change is coming to the way Co-op trades… leading to a radical transformation in the way it thinks about buying in relation to its customer. Co-op’s new missions-centred approach will form the basis of its trading strategy going forward.
CLICK HERE to book your place and find out who will be joining Matt Hood to share the full story.
