The Co-op’s food retail division has notched up its 22nd consecutive quarter of like-for-like sales growth despite the tough trading conditions and comparisons with a bumper period last year that benefitted from hot weather and the football World Cup.
The society’s total food sales grew by 3% to £3.7bn over the half year to 6 July, with like-for-like sales increasing 1.7%. The unit’s underlying operating profit jumped 50% to £120m.
The group highlighted that it had a successful Easter bank holiday, driven by its “competitive offer” and helped by the warm weather. It also revealed that in its wholesale operation, 90% of Nisa retailers have now taken lines from across Co-op’s own brand range, which are now generating weekly sales in excess of £2.5m.
The Co-op’s overall pre-tax profit fell from £44m to £25m due to weakness in its funeral division. Total sales increased by 12% to £5.4bn, reflecting a full contribution from the recently acquired Nisa business and the strong performance of its Food business.
Looking ahead, the group highlighted that Brexit was continuing to create uncertainty and that a no-deal exit from the EU was likely to cause some disruption to its supply chain. It is hoping to negate some of the impact by stockpiling essentials, including water, toilet paper, and canned goods.
Chief Executive Steve Murrells stated he was most worried about fruit, where he expected prices to surge as retailers may be forced to fly in supplies. “We think there will be shortages in some fresh food areas. Where that is the case, we would endeavour to bring it in to give our customers a choice,” he said, whilst questioning how much of the inevitable price increases it could absorb.
Commenting on its latest results, Murrells said: “We’ve enjoyed another good six months where the strength of our business has led to a further £35m of value being generated for our members and their communities. Our food business continues to perform strongly in a highly competitive market and has now recorded 22 consecutive quarters of like-for-like sales growth. As our largest business, it is providing the fuel for our growth in terms of member value and community impact.”
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