The Co-operative Group reports year of further progress
The Co-operative Group has seen its full year like-for-like food sales climb by 1.6% after its core convenience business benefited from its investment in price and products.
In the year to 2 January 2016, the business’s underlying profit rose by 3.3% to £250 million driven by strong sales and cost efficiencies.
Some 97 new food stores opened in the period to take the total estate to over 2,800 stores. The business also refitted a further 264 stores across the UK.
In addition, it invested £125 million in lowering food prices and cut the price of fruit and vegetables by more than 15%.
According to figures released by Kantar this week, the Co-operative saw its fastest growth since its Somerfield acquisition in 2011 in the 12 weeks to 27 March. It also increased its market share.
Across the wider Co-operative Group, which also includes funeral and general insurance businesses, underlying pre-tax profits were £81 million compared with £73 million in the prior year.
Reported pre-tax profits were £23 million compared to £124 million in the previous year when the figure was boosted by a gain of £121 million from one-off disposals. Group revenues were £9.3 billion.
Richard Pennycook, chief executive of The Co-operative Group, said: “This has been a year of further progress at the Co-op as we have invested to drive the growth of our businesses. Underlying profits have increased but our priority this year has been on putting the building blocks in place for the long-term.
“We are, however, only one year into our Rebuild and whether it is driving further growth in our businesses, improving member engagement or getting back to our campaigning roots, there is still much to achieve.”
The Co-operative Group has also announced that Pennycook has requested that his remuneration package be reduced “substantially” now that the rebuild of the group is “well underway”. From 1 July, his base pay will be cut from £1,250,000 to £750,000 with his long and short-term incentives also reduced.
The group has also strengthened its board with the appointment of Lord Victor Adebowale as an independent non-executive director.
In addition, Ian Ellis, group chief financial officer, has been appointed to the board while Pippa Wicks has been appointed as chief operating officer on a permanent basis after working in the role on an interim basis since 2014.
