The Co-operative Group today reported a rise in revenue for the first half of the year as the coronavirus lockdown drove up grocery sales, but warned of a challenging six months ahead.
The Co-op reported revenue of £5.8bn in the 26 weeks to 4 July, up 7.6 per cent on last year.
Pre-tax profit rose 35 per cent to hit £27m.
Net debt was trimmed from £695m to £555m.
Why it’s interesting
Co-op’s half-year results are a mixed bag for the retailer, which saw a boost in grocery sales over lockdown but sounded the alarm over ongoing economic uncertainty.
Revenue in the group’s food division rose 5.2 per cent — 9.9 per cent in the second quarter — as Brits shopped closer to home and ate out less frequently.
Like-for-like sales excluding fuel rose 8.8 per cent, while market share ticked up 0.5 percentage points.
Wholesale revenue from convenience store chain Nisa jumped almost 14 per cent to £801m as more people opted to shop in local stores.
Funeralcare revenue increased 3.5 per cent to £148m, with higher volumes offset by lower average revenue per funeral due to Covid-19 restrictions.
Co-op spent £54m on Covid-19 costs as it forked out on additional staff and protective equipment. Costs are expected to hit £97m by the end of the year.
The group’s pre-tax profit jumped 35 per cent over the first half, though a tax charge of £43m meant it swung to a £26m loss after tax.
Despite positive trading over the period, Co-op warned of a challenging second half due to tough competition and worsening consumer confidence.
The company also said it was planning for further local lockdowns as the pandemic continued.
Co-op said it had resumed its supermarket store opening programme and has committed to investing £130m in opening 50 branches, with the creation of 1,000 new jobs.
The firm said the exceptional impact of Covid-19 would continue to affect its funeralcare business, while the insurance market would remain highly unpredictable.
What Co-op said
“We are living in unprecedented times, but the response of our Co-op has been exceptional and I’m immensely proud of my 60,000 colleagues who’ve helped to feed and care for the nation during this difficult period,” said chief executive Steve Murrells.
“The coming months and years remain uncertain, and we know our own Co-op will not be immune to the pressures the recession brings to family budgets and to local and national economies. We will continue to invest within our core businesses to ensure that our Co-op value resonates within Co-op households and local communities.”