Co-op ‘hungry for more’ as profits rise and turnaround plan takes shape

The Co-operative Group has unveiled plans to create a more sustainable business on the back of an uptick in profits.

The Manchester-headquartered company made a profit before tax of £72m last year, up from the pre-tax loss of £132m recorded in 2016.

Revenues came in at £9.5bn, the same as the year previous, although Co-op said the level sales figure was in line with its new turnaround plan.

Called Stronger Co-op, Stronger Communities, the plan will see the company taking steps to become ‘more competitive, relevant, sustainable and innovative’, it said in its latest annual results.

The focus will lie on efficiency, convenience and maintaining a ‘capital-light, digital-first’ approach as it enters new markets.

The Co-op has already taken several steps under the new plan so far this year, including a £50m investment in reducing its food prices announced in January.

The company is also bolstering its food business by expanding its estate, with 100 new Co-op convenience stores planned for 2018 along with the acquisition of wholesaler and retailer Nisa.

Similarly, to strengthen its funeral and life planning operation, Co-op acquired legal services provider Simplify Probate.

Chief exec Steve Murrells said: “Today’s results show how much progress we have made. All our businesses have performed well and we have increased profits and reduced debt, while continuing to invest for colleagues, members and customers.

“The success we are enjoying shows that the Co-op’s difference really resonates today - a different ownership model and a different approach to business, based on returning profits to our members and their communities.”

He continued: “We’re delighted with our performance, but we’re hungry for more and ready to create the Co-op of the future.

“Whether it’s in our existing business areas or through new ventures, we want to make the Co-op ever more competitive, relevant and innovative.

“That is why we are launching the Stronger Co-op, Stronger Communities plan.”

Speaking further, Mr Murrells said that for the business to succeed as a Co-op, it needs to be “even more successful commercially and our community efforts need to be concentrated on the things that matter to people”.

He added: “We know there are challenges ahead, but we are confident that with the support of our colleagues and our members, the strength of our brand and continued investment in our businesses we will achieve our goals.”