Co-op makes a return to profit
The Co-op has made a return to profit and reported a strong performance at its food retail business.
The group said full year like-for-like sales at its food business rose by 3.4% in 2017 despite a “highly competitive” market. Convenience store like-for-like sales rose by 4.3%.
Total sales for the year were £7.054 billion compared to £7.064 billion in the previous year following the sale of 298 smaller food stores to McColl's Retail Group.
Underlying operating profit at the food business, excluding any one-off items, property and business disposals and the change in value of investment properties, was in line with last year at £182 million.
The Co-op said the business benefited from strong Christmas trading with a 6.2% jump in like-for-like sales over the two weeks to 1 January. This was almost double the 3.5% sales growth it reported in the previous year. Overall, its Christmas and New Year sales were up 9%.
During the period, the Co-op made a £50 million investment in reducing prices. It also in the process of expanding its convenience store estate with 100 new stores planned for 2018. In addition, a "pay in the aisles" pilot is underway as the retailer looks to enhance the shopping experience for customers in-store.
Across the wider Co-op which includes funeralcare, insurance and wholesale businesses, pre-tax profit was £72 million compared to a loss of £132 million in the prior year. The 2016 loss reflected a write down of a stake in the Co-operative Bank. Underlying pre-tax profit rose by 25% to £65 million.
Steve Murrells, chief executive of the Co-op, said: "Today's results show how much progress we have made. The success we are enjoying shows that the Co-op's difference really resonates today - a different ownership model and a different approach to business, based on returning profits to our members and their communities.”
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