Sales at The Co-operative Group’s food division increased 4.8 per cent year-on-year to reach £7.5 billion in the 12 months to January 1st 2011, according to preliminary results announced today.
During the course of the year, which has seen Co-op Food continue to integrate Somerfield into its operations following its 2008 acquisition of the supermarket, operating profit rose 33.3 per cent to £382.6 millon.
Since the end of 2009, 524 stores have been refitted and by April 2011 all stores in the Co-op network will be operating under the Cooperative brand, bringing to an end a reportedly disruptive transformation process.
In 2010 Co-op firmly established itself as the fifth largest grocery retailer, behind Tesco, Asda, Sainsbury’s and Morrisons, and there are major expansion plans in the pipeline for the 12 months ahead.
Such an ambitious expansion strategy has not come without its pitfalls though, and unlike Asda, Sainsbury’s and Morrisons, Co-op food was unable to report like-for-like (LFL) sales growth in 2010.
“LFL sales were down 2.5 per cent reflecting the disruption to stores by the integration of Somerfield,” the statement announced.
“Given two winters in which our stores were hampered by severe weather conditions, a poor summer and an anticlimactic World Cup which can normally be relied on to drive sales, the fact that our Food business has ended the year with an operating profit that is over 30 per cent up on last year’s figure is commendable.”
Co-op has started 2011 by detailing more ambitious plans, including the launch of a new corporate social responsibility agenda that encompasses all parts of the business.
Dubbed the Ethical Operating Plan, the scheme aims to promote the co-operative values through various means to help improve society.
Customers should expect to see more Fairtrade produce and a greater range of Healthier Choice items in stores nationwide, while co-op will also try to better involve itself in the societies it has a presence in.
Peter Marks, CEO of The Co-operative Group, said: “We now anticipate challenging trading conditions through to the end of this year and into 2012.
“With consumers feeling the squeeze on their spending, I know that all of our businesses will have to fight for their market share.
“That means we must make even greater efforts to ensure we are responding to the needs of our members and customers and are giving them good reasons to continue to trade with us.”