THE Co-operative Group has hailed a market-beating performance from its food retailing business after new premium ranges and a store overhaul boosted sales.
The Manchester-based Co-op saw like-for-like food sales growth of 5.2% in the 28 weeks to July 28, helped by new Truly Irresistible and Healthy Living product ranges.
The food business, which accounts for more than 40% of group sales, increased profits 17% to £64.4m, with the group gaining a 15% sales uplift from refitted stores over the period.
The group is on track to rebrand 590 of its 2,300 convenience stores and supermarkets by the end of the year.
Chief executive Peter Marks said the Co-op’s pharmacies and funerals businesses also saw strong trading.
He said: “The markets in which we operate remain intensely competitive, but we are confident of making further progress in the second half of the year.”
The Manchester-based Co-op completed a merger with Rochdale’s United Co-operatives in July, creating the world’s largest consumer co-operative with 4.5 million members and 87,500 staff. But overall group profits were down 38% to £115.7m after insurance payouts from the Co-op’s financial business following the summer’s floods, and restructuring costs.
The Co-op’s funerals business dealt with the twin challenges of a declining death rate and heavy competition in the sector to boost profits by 35% to £15m. The division, which has more than 600 funeral homes across the country, has spent £5.8m on its premises and fleet so far this year, and lifted funeral sales by 6% to £114.1m in the first half.
The group’s pharmacies also pushed up profits by more than a third to £15.4m, with prescription growth ahead of the market. The Co-op expanded its pharmacies by acquisition but also reported good organic sales growth.
Mr Marks added that the Co-op’s fledging legal services division was beginning to deliver on its early promise. The business has now been trading for a year, dealing with 5,500 personal injury claims.
The Co-op’s farming business, which cultivates more than 70,000 acres across England and Scotland under its Co-operative Farms brands, reported a positive half despite the floods hitting crops of vining peas in Lincolnshire. Higher cereal prices more than offset the disruption to the business.
But the group’s general insurance business, which insures around 650,000 motorists and 950,000 households, handled around 5,000 more claims and paid out £55m extra as a result of the extreme weather.
The Co-op, which is known for its ethical policies, recently announced plans to axe around 1,000 jobs at its financial services business under plans to save £100m a year in costs.