The Co-op profits fall as it announces partnership with Amazon

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The Co-op has registered a dip in profits as it “invests in its business and colleagues” including a new partnership with Amazon on grocery delivery.

The grocer reported an underlying operating loss before tax of £15m, down £71m on 2020 against the strong comparables of the first lockdown, but said it was in line with the previous year when profits slumped £11m.

The Co-op revenues also dropped slightly by 3.2% compared with the “unprecedented purchasing behaviour” of the early pandemic.

Food sales excluding fuel grew 6.5% on a two-year basis but also fell 2.8% compared with 2020, while wholesale revenues were down 14% as the retailer wound up its partnership with McColl’s.

The retailer also highlighted that, going forward, the supply chain issues plaguing the sector at large will continue to have an impact on profits.

Co-op group chief executive Steve Murrells said: “As we continue to experience the effects of the Covid-19 crisis, it is clear that things will never be the same again.

“As a business and as a society, it is crucial that we learn from the past 18 months, particularly as we turn to the momentous task of rebuilding Britain and face into the continuing disruption to our business and our supply chains.

“Despite the challenges that the pandemic has presented to us, we have adapted to become more efficient and agile, which has allowed us to continue to feed and care for the nation throughout the crisis.

“While our commercial performance has been impacted by Covid-19 and Brexit headwinds, we have responded magnificently to support our colleagues, members, customers and communities throughout.”

The results come the same day as the convenience store specialist rolled out an online grocery partnership with tech giant Amazon.

The partnership will give Amazon Prime customers the ability to do a full shop of Co-op products on Amazon.co.uk, with same-day delivery and two-hour scheduled time slots.

The partnership will launch from stores in Glasgow, including surrounding areas such as Hamilton and Paisley, from today.

The Co-op said the partnership would then be rolled out to further regions across the UK before the end of the year, with a nationwide rollout in the future “being the ambition”.

This is the second such partnership Amazon has struck with a UK grocer, having made a similar deal with Morrisons in August last year.

As part of its wider delivery ambitions, the Co-op has also announced an expansion of its robotic delivery trial with Starship Technologies.

The grocer said it will more than double the number of autonomous delivery robots it operates to 500 by the end of the year and roll the technology out to new regions including Cambridgeshire and the north of England.

Murrells added: “The pandemic has accelerated changes in consumer shopping trends and we’re driving forward with exciting plans to provide rapid kerb-to-kitchen grocery delivery services.

“We are delighted to be working with Amazon. Its reach, leading technology and innovative approach mean greater convenience for people in their communities. This, combined with our extended partnership with Starship Technologies, marks a significant milestone in our online strategy.”