Co-op reports increased half-year revenues and profits
The Manchester-based Co-op Group reported better revenues and profits for the six months to July 4, today.
Sales of £5.797bn compared with £5.389m in the previous year, while pre-tax profits rose from £20m to £27m.
The group also revealed that it has given £15m, so far, to community causes in response to the COVID-19 emergency.
It said the rise in sales was driven by exceptional food and wholesale results. During the reporting period the business created 7,000 temporary posts to manage increased demand.
However, it warned of a significant increase in costs from COVID-19 and a challenging second half ahead, with an uncertain economic backdrop and the need for further investment.
It also highlighted major initiatives to improve colleague pay and benefits, boost diversity commitments and relaunch membership with and increased community focus.
Revenue in food rose 5.2% to £3.9bn as customers shopped closer to home and ate out less frequently during lockdown.
Nisa wholesale revenues increased 13.9% to £801m, benefiting from local shopping in lockdown and a range of improvements under Co-op ownership.
Funeralcare revenue increased 3.5% to £148m, while legal services revenue was flat year-on-year at £19m, with increased demand for will and divorce services.
Outlining the impact of COVID-19 on the business, it revealed costs of £54m, including additional recruitment and PPE (personal protective equipment) purchase, with expected costs of £97m for the full year.
The Co-op has received £33m government support in the first half in business rates relief and furlough payments for limited number of colleagues. However, it said it will not take the government furlough job retention bonus.
Chief executive, Steve Murrells, said: “We are living in unprecedented times, but the response of our Co-op has been exceptional and I’m immensely proud of my 60,000 colleagues who’ve helped to feed and care for the nation during this difficult period.
“We’ve shown how our co-operative approach to doing business provides enhanced value for our customer-members and the communities in which they live.
“At a time of crisis, our country needs a strong and progressive Co-op and these results evidence that we are ready to deliver even more for our key stakeholders.”
He added: “Our vision of co-operating for a fairer world has taken on even greater resonance during this exceptional time, with the pandemic bringing to light inequalities and injustices which no longer feel remotely tolerable.
“Actions, however, clearly need to marry with the words, which is why we have announced four important initiatives – improvements to colleague pay and benefits; our new diversity and inclusion commitments; the creation of new routes to work and our relaunch of membership.
“Being a Co-op has never felt more meaningful and right. The role of business in society is changing and we are proud to lead the way.
“Everything we are doing points to a Co-op in tune with the communities in which it operates, one which is determined to innovate and drive change for the benefit of our members and the places where they live and work.
“The coming months and years remain uncertain, and we know our own Co-op will not be immune to the pressures the recession brings to family budgets and to local and national economies.
“We will continue to invest within our core businesses to ensure that our Co-op value resonates within Co-op households and local communities.”