A competitive environment has impacted sales at The Co-operative’s convenience store business, which experienced a £30m drop in underlying operating profit to £288m in the last year.
The firm announced the news today (21 March), as part of the publication of its preliminary results for the 53 weeks to 5 January 2013. The group’s underlying operating profit fell £92m to £431m during the year, while total sales came to £13.5bn – a £3m increase on the previous year’s figure.
Peter Marks, group chief executive, said:“2012 was a challenging year for The Co-operative Group. Our core businesses performed in line with expectations in their respective markets, delivering an underlying operating profit of £431m against the backdrop of a tough economy. However the group’s statutory profit was adversely impacted by a number of factors within the Bank.
“These included a realistically cautious approach to the impairment of corporate loans within the non-core business, further PPI provisioning and the write-down of IT assets, together totaling £650m.”
He added that The Co-operative’s food business saw a “marked improvement” during the second half of the year, highlighting a growth in the last quarter for its like-for-like (LFL) sales performance.
This included LFLs - including VAT and excluding fuel - which increased by 0.3% in the final quarter and, in the three weeks over Christmas by 2.2% overall and by 5.5% in convenience stores.
The Co-operative opened 83 new UK stores during the year, which included the acquisition of Scottish convenience store chain David Sands, and increased its estate in Scotland by 28 stores, in addition to the takeover of 10 former Costcutter stores in London. These stores were trading under The Co-operative Food brand before Christmas.
Reporting on the future of its food business, the firm said it would be building on the momentum of the second half of the year with the planned roll-out of new store formats, which had been trialled in 2012.