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The Co-op has posted underlying profits of £43m during the first half of the year, up from a £1m loss the prior year, as its cost-saving efforts proved fruitful.
The retailer said the improvement was driven by annualisation of £101m cost savings achieved in 2022 and further cost savings in H1 2023, streamlining operational processes and realising the benefits of lower costs to serve as a result of previous investments in supply chain infrastructure and IT systems.
Despite a “challenging economic backdrop”, Co-op said it delivered a “robust sales performance”, with revenues marginally down on H1 2022 at £5.2bn, driven by lower revenues in the Food Retail business, resulting from the impact of the petrol forecourt sale.
Food revenue dropped by £0.3bn to £3.6bn (H1 2022: £3.9bn), predominantly driven by the impact of the sale of its petrol forecourt business. Excluding the revenue from these stores generated in H1 2022, sales were up 4% year-on-year, on a like-for-like basis in our convenience stores (H1 2022: £3.4bn).
Shirine Khoury-Haq, chief executive of the Co-op, said: “I am very proud of our success over the last six months, particularly given the prevailing economic and market conditions. This performance wouldn’t have been possible had we not taken the decisions we did, as early as we did in 2022, when it came to better management of our members’ money and running the business more efficiently.
“While the economic environment remains challenging, we have again improved our underlying financial strength, significantly grown our membership base and delivered more for our members and their communities. We have done this while staying true to our Rochdale Principles, cooperating through partnerships and campaigning on topics which matter to our members most. We have invested heavily in supporting our members, communities, colleagues and customers through the cost-of-living crisis, and we will continue to do so.”
She added: “The business momentum established in the second half of the last financial year has carried through into the first six months of 2023 and has allowed us to significantly strengthen our membership offer and proposition – we have put our member-owners at the heart of what we do. We have listened to what they need, and we have not hesitated in our response.
“While there remains much for us to do, I’d like to thank all of our colleagues for their hard work in the first six months, which is delivering meaningful benefits for our members and their communities.”
