Speaking as the group reported a 1% drop in food sales in the past six months, its first decline in more than two years, Marks said: "As anticipated, 2010 has been challenging so far, with tough economic conditions across all our businesses. Looking ahead, however, we do not expect things to improve until late 2011 at the earliest."
He added that the integration of former Somerfield stores, bought by the Co-op in 2008, had caused disruption, although like-for-like sales at the 2,500 stores refitted since the acquisition had risen 2.5%.
The group believes its expansion will lead to stronger performance. "We are reaping considerable benefits from our new-found scale a 7.6% grocery market share with better buying terms being reflected in keener prices," Marks said. "When we acquired Somerfield we said that the integration needed to be done at pace. That is still our plan and we are on track to deliver it by early next year."