Interim results for the half year to the 2nd July saw Manchester based Co-op see its revenue increased by 2.2% to £4.7bn as customer transactions grew by 3.3% and while Profit before tax fell to £17m from 2015: £36m, the group say this is all in line with its Rebuild investment, pay increases for frontline colleagues and price reductions in food.
The half year saw like-for-like food sales rise by 3.1% while Funeralcare revenues held, with significant growth in pre-paid funeral plan sales offsetting the lower death rate
General Insurance (GI) delivered strong sales and profits performance, with more than 100,000 new policies sold in first half after launch of member-focused pricing initiatives.
The group is Half way through its three-year Rebuild phase, with further investment made in improving its brand and membership offer. The half year saw Capital Exoenditure of £149m as further improvements were made to food stores and funeral home estate
Costs from supporting functions increased from £37m to £52m to support required investment in brand and membership relaunch, and creation of new Digital division and there was major investment in Co-op colleagues as 5,400 managers attend “Being a Co-op Leader” events and all 70,000 colleagues embark on “Back to Being Co-op” sessions.
The group has also announced that more than 5 million members will receive new Co-op cards to mark the launch of a new membership offer, placing customers and communities firmly at the heart of the Co-op again.
Commenting on the results, Richard Pennycook, Group Chief Executive of the Co-op, said:
“These are exciting times for the Co-op as we continue to make this a better business that is more relevant for members, customers, communities and colleagues. These results, along with today’s relaunch of our compelling new membership offer, show the real value of “being Co-op” and our difference as a business. Revenues across the Group have grown and, in line with our strategy, profitability has fallen due to our major Rebuild investment, pay increases for our people and price cuts for our customers. We are able to invest for the long-term, strengthening the appeal of our products and services, because our business model allows us to pursue our unique approach, championing a better way of doing business for customers and communities.
“This long-term approach is evidenced by the continued reshaping of our Food store portfolio to support our own-brand, convenience-led strategy. This means we can, as necessary, forgo sales growth in order to ensure we have the right stores in the right places for our customers.
“We are only half way through the Rebuild and much remains to be done, whether it is investing in our digital capability or campaigning on key issues. We remain firmly on track with our plans and are encouraged that the work we are doing is attracting more and more people back to the Co-op.”
