The Co-operative Group has announced a downturn in food revenue from £7.44bn to £7.24bn, with an overall loss of £2.5bn for the year to 4 January.

Like-for-like food sales fell by 0.2%, while like-for-like sales in its core convenience chain rose by 1.6%. Second-half like-for-like performance saw an overall 0.6% increase with a 5.3% increase in convenience.

The loss in its food business has been put down to store disposals, a shorter accounting period and price reductions. Underlying profit was down from £268m to £247m. Results were also impacted by the Somerfield goodwill impairment.

"The scale of this disaster will rightly shock our members, our customers and our colleagues," said interim group chief executive Richard Pennycook.

"The food operating loss is after an impairment charge of £226m relating to goodwill, which arose on our investment in Somerfield, reflecting the fact that, moving forward, the business’s focus will increasingly be on convenience stores within the estate.

"Disastrous year"

"2013 was a disastrous year for The Co-operative Group – the worst in our 150-year history. Today’s results demonstrate that, but they also highlight fundamental failings in management and governance at the group over many years. These results should serve as a wake-up call to anyone who doubts just how serious the challenges we face are."

Chair Ursula Lidbetter added: "During 2013, it became apparent that our governance had fallen far short of the standards to which we aspire as a co-operative society. Now is the time to put that right through fundamental reform – we have to act with urgency if we are to lay the foundations for a stronger, healthier co-operative business in the future."

Pennycook’s outlook remained positive as he spoke of the group’s True North strategy on the food side, which aims to focus on reducing prices for customers. The development of the convenience store estate is going well, with ongoing plans to launch more than 100 stores this year.