The Co-operative Group’s food business operating profits soared 33.3% in 2010 despite a 2.5% drop in like-for-likes which it blamed on disruption from the Somerfield integration.

Food sales grew by 4.8% to £7.5bn in the year ending January 1 and operating profit was up to £382.6m.

Pre-tax profit across the group, which includes food, funeral, financial services and pharmacy, was up 48.3% to £545.7m.

The retailer said 2010 was “the year of integration” for its food business in which 524 Somerfield stores were refitted and rebranded as The Co-operative Food stores. It expects all Somerfield stores, which it acquired in 2009, to be operating as The Co-operative Food by April 2011.

The group said: “When we set out to create a combined food business, from The Co-operative Food and Somerfield, within two years, we knew we were setting ourselves stretching targets that would demand intense effort to achieve. We also fully expected to see an impact on performance from the Somerfield estate while such a massive change programme was being implemented.”

As part of the rebrand it has harmonised ranges across the two brands, adopting selected Somerfield products, and has integrated the supply chains across the two businesses, including incorporating one of Somerfield’s depots.It has also centralised the marketing, buying and training functions across the two operations.

The retailer said it was working to improve its range, especially in larger stores, and would continue doing so this year. It said it is also looking to make more of seasonal events and developing more ‘hero’ products such as its popular bonfire bangers.

It said: “In 2011 we will continue with our rapid pace of improvement. Our stronger buying power through our increased scale is enabling us to offer customers better value.”

The retailer is planning to open 50 new stores in 2011, 125 in 2012 and 175 in 2013.

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