Profits fall at Co-operative Food
The Co-operative Group said that its underlying operating profit at its food division dropped 9.5% to £288 million in the year to 5 January 2013.
Total sales, excluding VAT and including fuel, increased to £7.44 billion from £7.34 billion in the prior year. Like-for-like sales slipped 0.7% overall although like-for-like sales at the division's convenience stores increased by 1.9%.
The Co-op said that 2012 had been a challenging year with overall profitability for the food division impacted by the competitive environment and its continued investment in price, stores and the supply chain. However, the division saw a marked improvement in its performance in the second half of the year, with like-for-like sales, excluding VAT and including fuel, increasing by 0.3% in the final quarter.
The group added that it would build on the momentum of the second half by rolling out new formats trialled in 2012 and prioritising own label product development and customer service.
Last year, The Co-op opened 83 new UK stores including the acquisition of 28 David Sands convenience stores in Scotland and ten former Costcutter stores in London. The group also invested in its distribution network with the opening a new £22 million distribution centre at Avonmouth.
Chief executive Peter Marks said: "In our food business we are building on the momentum of the second half under our strengthened management team with a continued focus on prices and the roll-out of new store formats. During 2013 we will further improve the shopping experience for our customers."
Across The Co-operative Group sales rose 1.5% to £13.5 billion in 2012 although underlying operating profit dropped to £54 million from £526 million in the previous year. The Co-op said this was due to a number of factors in its banking division.
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