Co-op swings to pre-tax loss but food like-for-likes rise

The group suffered a pre-tax loss of £132m in the year to December 31, 2016, in contrast to a £23m pre-tax profit in the previous year.

The Co-op blamed the loss on the writedown in the value of its shareholding in the The Co-op Bank and ongoing investment in its rebuild plan. 

Group operating profit, which excludes one-off items, property and business disposals and change in value of investment properties, jumped 32.1% to £148m.

Underlying pre-tax profit fell 27.1% to £59m.

In its core grocery business, like-for-likes rose 3.5% and total sales inched up 1% to £7.1bn.

Operating profit rose 4% to £203m, but underlying operating profit dropped 2% to £182m.

Investment

The Co-op said it ploughed investment into store refits, colleague pay, infrastructure improvements and British produce during the year, helping it become the fastest growing grocer outside of the discounters on a like-for-like sales basis.

During the year, the Co-op opened 112 new stores and refitted 155 stores. It also rebranded 607 shops with its new logo, which is a throwback to its 1960s cloverleaf design.

The Co-op said it ploughed £88m into opening new stores and £85m into re-fitting existing shops.

The mutual sold or closed 141 stores that “didn’t fit” with its drive “to give customers the best convenience shopping experience.”

At the year end, the Co-op had 2,774 convenience stores, down slightly from the 2,803-strong portfolio it had at the end of 2015.

‘Delivering value’

Co-op Group chief executive Steve Murrells, who took the top job from Richard Pennycook at the start of March, said: “We’ve made great progress in rebuilding our Co-op, with all our businesses delivering strong performances.

“While much remains to be done, our ‘rebuild’ plans have really started to deliver value for our customers, our members and their communities.” 

“We will continue to take our existing businesses forward and ensure they are ready for the digital age”

Steve Murrells, The Co-op Group

As part of the next phase of the group’s growth, Murrells reiterated his ambition to expand into new markets. 

“We will continue to take our existing businesses forward and ensure they are ready for the digital age, but we will also look wider than our current markets,” Murrells said.

“We are exploring how we can enter markets that are not serving people well and challenging existing providers.

“To do that we are thinking again like the original Rochdale Pioneers. They were true pioneers in every sense of the word – disruptors in markets and agitators for change.

“There’s never been a more exciting time in the Co-op’s history and we are confident that we’ll continue to thrive.”