Co-op has seen underlying pre-tax profits divebomb by nearly 50 per cent in its first half as it diverted funds to its members reward scheme.
In the 26 weeks until July 1, group underlying pre-tax profits dropped 48 per cent to £14 million, while group operating profits also declined 29 per cent to £51 million.
However, profits before tax were up 47 per cent to £25 million, partly due to the sale of a number of one-off and non-trading items.
Its grocery arm continued to perform ahead of the group, seeing like-for-like sales rise for the 14th consecutive quarter by 3.5 per cent, and operating profits in jumped three per cent to £65 million.
This was mirrored in its convenience arm which saw like-for-likes rise 4.5 per cent, but reported food sales dropped 1.2 per cent to £3.48 billion.
The large losses incurred comes as the UK‘s sixth largest grocer, now behind Aldi, pumped £35 million into its membership rewards scheme.
It stated that membership has grown by 500,000 to 4.5 million.
“Championing a better way of doing business for our members and their communities is what the Co-op is all about and I‘m delighted that we are really starting to deliver on that purpose,” Co-op chief executive Steve Murrells said.
“Since we launched our member reward scheme in September 2016, more than 1.1 million people have signed up to join the Co-op.
“As a result we‘ve been able to give £35 million back to our members and their communities over the first half of this year, a conscious decision to share our success with our members and the 4000 good causes which mean so much to them.
“We can do all this because our businesses have continued to perform in the face of challenging markets.
“Food has posted a 14th consecutive quarter of like-for-like sales growth, Funeralcare continues to lead the market on the back of the launch of our Simple Funeral offer and our Insurance business continues to lead on making driving safer for the young.
“Across our business we are also maintaining our commitment of re-investing for the future success of our Co-op.”