The grocery retailer also revealed it expects the increase which will be partly offset by increased food sales and the expected business rates relief announced by the chancellor.
CEO Steve Murrells said no part of the business has been “unaffected by the outbreak of the virus.”
The retailer reported a 7% increase in total revenues to £10.9bn in the year to 4 January, driven by “continued strong performance” from food, including annualisation of Nisa wholesale, acquired in May 2018.
It reported an underlying operating profit of £283m as revenues in food rose by 3% to £7.5bn, as like-for-like sales grew by 1.9%.
Wholesale like-for-like revenues increased by 1.1%, outperforming the market by 1.4%. Nisa attracted 94 new partners to the business.
In the period, the Co-op opened 79 new stores alongside refitting 152 shops and extended 10 of its sites.
Murrells said: “The Co-op made further financial progress through 2019, showing that co-operation is working. While we didn’t know it at the time, that performance set us up well to withstand the impact of the Covid-19 crisis and to enable us to support the communities we operate in.”
Allan Leighton, Independent non-executive chair of the Co-op, added: “The Co-op is drawing deeply on our values of commercial responsibility and community concern to play our part in responding to Covid-19.
“Our commitment is to do all we can to help our members, customers and colleagues through the weeks and months ahead. It is already clear that Covid-19 will have profound consequences for the UK and global economy and our Co-op members and customers will not be immune.”
He concluded: “Looking ahead, we believe that co-operative business endeavours and co-operative ways of working will be needed in the future even more than they were in the past.”