In a remarkable first half, Co-op has turned around its financial status with significant profit gains, despite facing considerable theft challenges.
- Co-op reported a robust bounce back, recording £58m in pre-tax profits compared to a £33m loss last year.
- The retailer faced a 19% increase in theft and fraud costs, reaching £39.5m amidst a shoplifting surge.
- Sales in Co-op’s food sector rose by 3.2% to £3.7bn, demonstrating strong performance across physical and online stores.
- Looking ahead, Co-op aims to expand with 120 new stores by 2025, focusing on increasing membership and reach.
Co-op has achieved a notable financial turnaround in its first half of the year, reporting a substantial rise in pre-tax profits to £58 million. This comes as a stark contrast to the previous year’s £33 million loss, marking a significant financial recovery for the company.
The retailer’s success is even more noteworthy given the challenges posed by a 19% increase in leakage costs due to theft and fraud, which surged to £39.5 million. This increase is attributed to a pervasive shoplifting issue affecting the sector.
Despite these challenges, Co-op’s food business reported a 3.2% increase in sales, reaching £3.7 billion. This growth is attributed to strong performances in both physical stores and online channels, reinforced by an underlying operating profit increase of 10% to £85 million.
Critical to Co-op’s success was its commitment to paying the Real Living Wage, which resulted in absorbing £39 million in wage increases. Additionally, the company invested £55 million into pricing strategies aimed at maintaining competitive edge.
According to Circana data, Co-op’s performance was significantly ahead of the convenience market by 7.4 percentage points, highlighting the company’s effective strategic positioning.
Co-op also reported a 20% increase in active members, totaling 5.5 million, aligning with its ambitious target of reaching 8 million members by 2030. This growth in membership is a key part of its strategic focus moving forward.
CEO Shirine Khoury-Haq expressed optimism regarding the company’s trajectory, stating that Co-op’s strategy is gaining momentum despite a challenging external environment. She emphasized the company’s strength in outperforming the market while significantly investing in colleagues, pricing, and business growth.
In future plans, Co-op intends to open 120 new stores by the end of 2025, encompassing both retail and franchise opportunities, as part of its strategy to broaden its reach and membership base.
Overall, Co-op’s strategic efforts and financial resilience position it well for future expansion despite existing challenges.
