The Central England Co-op has reported “solid” performance for the year to 22 January 2022, although sales in its 243 food stores fell back against tough comparatives.
Total operating profit increased 9.9% to £23.2m on turnover up 0.7% to £875.0m. However, in its core Food Retail division, sales slipped 3.4% to £667.6m.
The society blamed the decline in its convenience stores on events that occurred in the second half of the year, such as the easing of Covid restrictions and hospitality businesses reopening. This meant demand for its goods and services declined having surged during the height of the pandemic in 2020.
CEO Debbie Robinson also noted that the business had faced “significant challenges” on product availability due to Brexit, the pandemic, the HGV driver shortage, and Covid sickness which “heavily impacted” food sales.
“Whilst the situation is improving and mitigations have been put in place, we expect the trading environment to continue to be challenging into the new financial year,” she said.
Looking ahead, Robinson highlighted that there were “significant challenges” facing the convenience sector, including the new rules governing the promotion and placement of products high in fat, sugar, or salt (HFSS) coming into force in October. However, she noted: “This is a real opportunity to encourage and support customers to eat better.”
Robinson added: “Inflation has reached a 30-year high, which will impact on our cost base and households will face considerable increases in the cost of living. Therefore, we expect to see a significant threat to both household spending and business profitability.”
