Co-op hit by falling food sales
Co-operative Group has reported a fall in first-half underlying profit to £230.8 million, down from £262.3 million a year earlier.
The mutual has been hit by declining food sales in the face of strong competition, reduced government funding for prescriptions and a change in the income recognition policy on the sale of its funeral bonds.
More positively, Co-op’s food business has finally completed its integration of Somerfield and is moving into a development phase, not least with the modernisation of supply chain systems and processes.
In addition, Co-operative Financial Services (CFS) turned in a strong performance in the first half of 2011, recording profit of £131.3 million, up from £109.3 million a year earlier.
Britannia-branded branches of CFS will shortly be offering full-servicing of current accounts, giving customers a near four-fold increase in outlets to conduct their banking, and by the year-end, the mutual will have replaced its existing credit card platform with a state-of-the-art system.
Daring to look ahead, group chief executive, Peter Marks, says: “We do not see signs of any real improvement in the economy and we are planning accordingly to help our customers, as much as possible, through this difficult period.”