Co-op sees profits leap as consumers shop closer to home

The Co-op on Thursday reported a 35% jump in half-year profits after lockdown drove the food retail business to its biggest market share in two decades.

The group, which is owned by millions of UK consumers, said underlying sales in food retail jumped 8.8% in the six months to 4 July, aided by consumers shopping closer to home and eating out less frequently during the lockdown.

The convenience trend has continued in recent weeks, with stores where local Covid-19 restrictions have been put in place seeing sales rates double elsewhere in the UK.

Across the group, which operates 2600 food stores and more than 1000 funeral homes, half-year revenues were up 7.6% to £5.8 billion.

Covid-19 costs of £54 million were offset by £33 million of Government support, including from business rates relief, as the Co-op reported pre-tax profits of £27 million.

The food division has resumed its store opening programme, with 1000 new jobs set to be created by the end of the year from 50 new outlets, shop extensions and refits.

Chief executive Steve Murrells is braced for competition to intensify in food retail, where the group has grown its market share to above 7%.

He said: “It will be anything but a normal Christmas. But we are well placed because we are just around the corner and people will continue to shop locally.”

He also announced that about 33,000 staff are to get significant pay rises costing £20 million a year as part of initiatives aimed at tackling inequality and injustice.