The Co-operative Group’s profit has taken a battering after “significant supply chain disruption” last year, as the grocer pledges to support customers amid a cost of living crunch.
The supermarket reported profit before tax of £57m for 2021, down £70m on the year before when it pocketed £127m.
The Manchester-based grocer did mark higher profit than pre-pandemic levels, up £33m on the £24m sum for 2019.
Total group revenue hit £11.2bn, a slight dip on the previous year, following unprecedented sales during the first lockdown in 2020 when revenue hit £11.5bn.
Co-op said the dip also reflected significant supply chain disruption and system transformation in its food division to adopt “an increasingly multichannel offer.”
Co-op chair, Allan Leighton, described the past year as “a challenging one” but said the group had continued as planned with its investment strategy.
“The economic headwinds look stark and will be tricky to navigate but through our continued planned strategic investments our Co-op is well placed to ride out the storm and prosper beyond,” he added.
Shoppers have been confronted with empty shelves in the past year, with the food industry hammered by labour shortages, including a scarcity of HGV drivers.
Earlier this year, Tesco chair John Allan warned the worst was yet to come with businesses now grappling with hiked energy costs.
In results for the year to 1 January, Co-op said it had invested £140m in into its food store estate, including opening 50 new stores. It also said it had pumped some £39m into enhancing its food supply chain, including a new depot.
Some £18m had been invested in reducing prices across the business, Co-op added.
It follows the news that Co-op had appointed its first female chief executive in the group’s 159-year history, with Shirine Khoury-Haq set to step into Steve Murrells’ shoes next month.
Co-op’s interim chief executive, Shirine Khoury-Haq, said rising inflationary pressures and supply chain disruption had made for a “difficult operating environment”.
The food business was “disproportionately impacted” by tough factors, “given its focus on the community convenience market, with an operating model that is more reliant on flexibility in the supply chain,” Khoury-Haq added.
However, the business was “uniquely positioned” and a slew of investments across the business “now provides the basis for us to move forwards in a more efficient manner,” the interim chief added.
The supermarket would try to ensure it was supporting those experiencing the effects of the cost-of-living crisis, with a continued focus on its value food items, Khoury-Haq said.
Grocery price inflation reached 5.2 per cent, the highest level since April 2012, according to the latest monthly data issued by Kantar last week.