The Co-op has demonstrated financial resilience in the face of adversity, returning to profits in the first half of the year.
- Shoplifting and fraud have cost the Co-op nearly £40m, yet the group’s pre-tax profits have surged to £58m.
- Sales in the food business have risen slightly, despite the challenges present in the broader market.
- The Co-op’s commitment to paying the Real Living Wage has contributed to increased operating costs.
- Membership growth is on the horizon, as the group sets ambitious targets for expansion.
The Co-op’s financial performance for the first half of the year showcases significant recovery, with group pre-tax profits reaching £58 million, a notable turnaround from the £33 million loss recorded in the same period last year. This improvement comes amid a challenging retail environment, beset by a surge in shoplifting and fraud-related losses amounting to £39.5 million.
Retail sales in the food sector have experienced a modest increase of 3.2%, reaching £3.7 billion, indicating strong operational performance across both physical stores and online platforms. The underlying operating profit for the food segment improved by 10% to £85 million, even as the Co-op absorbed £39 million in wage expenses related to its commitment to the Real Living Wage and invested £55 million in pricing strategies.
Despite the broader market’s contraction, the Co-op has remained resilient, achieving a performance significantly ahead of its competitors by 7.4 percentage points, according to Circana data. This robust performance reflects the Co-op’s strategic focus on strengthening its market position and enhancing customer value.
The Co-op has reported a 20% increase in active member owners, reaching 5.5 million. This growth aligns with the company’s strategic objective to expand its membership base to 8 million by 2030.
Looking to the future, the Co-op plans to open 120 new stores across its retail and franchise sectors by the end of 2025, underscoring its commitment to expanding its reach and enhancing its food offerings. Shirine Khoury-Haq, the CEO, emphasised the inherent strength of the Co-op, stating that “we have delivered a strong performance for the first six months of this year as our strategy starts to gain real momentum.”
The Co-op’s strategic initiatives and resilience have positioned it well for future growth, even amidst a challenging economic landscape.
