Co-op celebrates H1 success

Despite a challenging economic backdrop, the Co-operative Group Ltd (Co-op) today (21 September) reported a robust sales performance during the first half (H1) of its financial year, with revenues marginally down on H1 2022, driven by lower revenue in the food retail business resulting from the impact of the petrol forecourt sale.

Underlying operating profit increased by £44m, driven by annualisation of £101m cost savings achieved in 2022 and further cost savings in H1 2023, the group said.

Meanwhile, an underlying loss before tax of £9m – £59m less than H1 2022 – helped mitigate inflationary headwinds and invest in its members, colleagues and communities, the retailer said in a press release.

Not only that, Co-op experienced a 55 per cent grown in member acquisition in the 26 weeks to July 2023, with almost half a million new member owners joining the group, it said.

Shirine Khoury-Haq, chief executive of the Co-op, said: “I am very proud of our success over the last six months, particularly given the prevailing economic and market conditions. This performance wouldn’t have been possible had we not taken the decisions we did, as early as we did in 2022, when it came to better management of our members’ money and running the business more efficiently.

“While the economic environment remains challenging, we have again improved our underlying financial strength, significantly grown our membership base and delivered more for our members and their communities. We have done this while staying true to our Rochdale Principles, cooperating through partnerships and campaigning on topics which matter to our members most. We have invested heavily in supporting our members, communities, colleagues and customers through the cost-of-living crisis, and we will continue to do so.”

Additional support to members, communities and colleagues during H1 included:

• £20million invested in H1, with a further additional £70m investment announced in July, into lower pricing across key lines in food stores, and introduction of member exclusive pricing.
• Continued commitment to the Real Living Wage, as part of an investment of £34m in salary increases in H1 2023
• Invested £5m in extending its 30 per cent colleague discount on Co-op branded products in food retail stores to the end of the year and a further £4m in winter support payments to colleagues in Q1.
• Published first socio-economic background report as part of efforts to better support colleagues from lower socio-economic backgrounds.
• Launched a new partnership with Barnardo’s, the UK’s largest children’s charity, to support 750,000 young people by raising £5m (£1m already raised since launch).
• Launched ambitious peatland restoration partnership with RSPB to preserve nature’s carbon ‘stores’, the equivalent of 400 football pitches in size, starting with two initial sites in Scotland and Wales. In the UK alone, an estimated 3.2 billion tonnes of carbon are stored in peatlands – this vital work will help tackle climate change and preserve nature.
• Continued to place wellbeing first through a comprehensive support package that includes mental and financial wellbeing, and new and updated policies such as compassionate leave, doubling paid leave.

Commenting on the interim results, Allan Leighton, out-going chair of the Co-op, said: ”At a time when interest rates and borrowing costs have soared, we’ve managed, under Shirine’s leadership, to reduce our net debt to an historically low level. While there is no room for complacency, there is room for confidence in our ability to plan ahead for growth in our Co-op and the impact we can have.

“It has been a pleasure to Chair this amazing business over the past nine years. Whilst I won’t be a member of the Board into the future, I will certainly remain a Co-op member. The Co-op has always had a special place in my heart and that will continue after I’ve stood down early next year. The Co-op I leave is far stronger and far more member-centric than the one I inherited back in 2015. It is testimony to our amazing colleagues that we can look forward now with such renewed confidence and optimism.”

Employing almost 60,000 people, the Co-op has an annual turnover of over £11billion.