Co-op profits quadruple but warns of rising costs

Co-op has reported a fourfold increase in profits but warned it faces more than £200m of new headwind and investment costs in the upcoming year.

The convenience store chain said part of the new costs relate to its active choices to support members, colleagues and communities with cost-of-living challenges.

It comes has the retailer reported its pre-tax profits had skyrocketed from £28m to £161m in the year to 4 January, despite group sales remaining flat at £11.3bn.

In its food business, underlying operating profit surged 16% to £201m as sales edged up 1.9% to £7.4bn, driven by strong sales across its network.

Online sales rocketed 46% during the year from £315m to £460m.

Co-op invested £206m into its food business, with £88m spent on lowering food prices for members, £82m on stores and £35m on new technologies.

It reported a 22% increase in membership growth to 6.2 million and said it was on track to reach its target of 8 million by 2030.

Chief executive Shirine Khoury-Haq said: “Our solid business performance alongside the progress we have made in right sizing the business and delivering against our new strategy, is enabling us to create more value for our member-owners every day.

“While broader economic challenges remain, our businesses are delivering strongly against the market and I’m proud that we continue to provide support to our colleagues, members, and their communities through the continued cost of living challenges they face.

“We look to the future with confidence, supported by a strong balance sheet and a clear and compelling business strategy and remain on track to reach our goal of 8 million Co-op member owners by 2030 with a focus on growing our Co-op for the future.”

Click here to sign up to Retail Gazette‘s free daily email newsletter