Cooplands has reported a loss of £9.8m for its latest financial period, adding it to the group of firms to report a dramatic impact from soaring raw materials costs.
In its results for the 39-week financial period to 31 December 2022, the Scarborough-headquartered chain posted revenue of £56.2m, which indicated improved sales compared to the £68.1m taken during the preceding 52 weeks. The accounting period was changed to align with its new parent company EG Group.
Despite this relative growth, Cooplands said it had “experienced a challenging period with increases in the cost of raw materials having a significant impact on margins”. It also noted that it continued to feel the pressure of increased labour costs across its estate, having made a decision in 2021 to pay above minimum rates for staff wages.
These factors resulted in a loss of £9.8m recorded for the period, a dramatic change from the £839k loss set during the prior financial year, and across a shorter timescale.
Cooplands said it continues to look to leverage the strengths (including economies of scale) of its parent company in order to diversify its brand into the petrol forecourt and convenience store channels. “At this time, the company relies on parental support,” it added.
EG Group was itself planning to leverage the Cooplands business for its own growth, alongside investments in foodservice, following the sale of the majority of its UK and Ireland fuel, foodservice, grocery, and merchandise business to Asda for £2.3bn back in May.
Cooplands highlighted it’s decision in 2022 to close its Hull bakery (along with a number of its shops) with production absorbed into the remaining bakery facilities by June of this year. The expected benefit of this, it said, would be reductions in overhead costs and greater synergies through production.
The company admitted the outlook for the economy remains uncertain going forward. “Like many businesses in our sector which have been impacted by raw material inflation our margins will likely continue to be challenged, with inflation also continuing to place consumer incomes under pressure,” it stated.
However, it said it would continue to look for “innovative solutions to offset these pressures, whilst also maintaining levels of product quality and great customer service”. A focus on the procurement strategy is to remain, it confirmed, complemented by further investment in its procurement team.
Founded in 1885, Cooplands currently operates a portfolio of almost 160 retail outlets across Yorkshire, Lincolnshire, Nottinghamshire, and the North East. It was acquired in late 2021 by EG Group, who subsequently announced plans to open 30 new stores per year through to 2026.
The likes of bread giant Hovis, sweet treats supplier Baker & Baker, and savoury pastry specialist Higgidy have all reported losses in their latest results due to rises in input costs.
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