The Co-operative Food records 2.1% like-for-like fall

The retailer blamed an “increasingly tough market” as operating profits fell from £389m to £309m.

Preliminary results for the year to December 31 reveals like-for-like sales in the first half were down 3.6% while there was a -0.4% performance for the second half.

Group pre-tax profit fell 5.8% to £373m while total sales rose 1% to £13.3bn.

The Co-operative said trading is “in line with expectations” and it does “not see any significant recovery in the UK economy during 2012”.

The retailer’s food division opened two new distribution during the year investing £110m in the process.

It refitted 421 stores, opened 32 stores and acquired Scottish convenience chain David Sands.

The retailer has faced significant problems in recent months and revealed last month it is to make 300 redundancies at head office.

Marks said: “The Co-operative Group has delivered a solid set of results against the toughest economic backdrop I have seen in more than 40 years in business. 2011 was a time of severe challenge for the UK economy and for our millions of customers and members.

“Consumers have been assailed by rising costs, credit squeeze and uncertainty about the future to an extent unparalleled in recent times. Against this background, I believe that this is a creditable performance. We have delivered profitability in-line with expectations, while maintaining our financial strength and resilience.

“Our determination to build on this success has not slowed and over the past year we have invested in the services, systems and infrastructure we need to deliver real value to our customers while setting out to realise the true potential of our vast, diverse customer base and our strong family of businesses.”

Marks said the retailer has “invested significantly” in discounts and special offers. “Although these moves have impacted our short-term profitability, we believe our first duty in times of financial and job insecurity is to help our customers make their money go further,” he said.

Marks said The Co-operative Group is “in better shape than ever before because of all the work done over the past five years.”

He added: “We will not allow the current economic downturn to knock us off the course we have set. We have the resources, the resolve and above all the belief to make our vision a reality. When better times come – and they will – these are the foundations on which we will build lasting success.”