The Co-operative Group has announced falling like-for-like sales in food, down 2.1% for the full year to 31 December 2011.

The Group said its performance in food reflected an increasingly tough year, with underlying profits in the division of £309m, down from £389m in 2010. Like-for-like sales improved over the year, from -3.6% at the half-year point, to -0.4% in the second half of 2011, with the improving trend continuing into 2012.

Notable hightlights for the financial year, were the pilots, run to introduce banking and electrical services to its food stores, according to Co-op.

Despite the challenging environment within food retail, The Co-op said it was continuing to invest in the business. Part of the investment takes the form of two new distribution centres opened for its food arm, and two more in the pipeline.

“A priority for the Food business has been to gain a deeper understanding of its customers in order to anticipate and satisfy their needs,” said the Group. 

“Customer research has indicated some scope for improvement in product availability, range, and value. Improvements are already starting to be delivered via change programmes such as SMART (Store Merchandising and Replenishment Transformation), product innovation and investment in reducing prices and a new ‘fewer, deeper, stronger’ promotional package.”

Overall, the group saw gross sales up 1% to £13.1bn, on 2010 figures.