The Co-operative Group is to open 100 new convenience stores following a “disastrous year”.
Billed as the worst year in its 150-year history by interim group chief executive Richard Pennycook, the Co-operative Group posted a £500m drop in group sales for the 52 weeks to 4 January 2014. Taking into account £2.1bn losses from discontinued operations and a £226m goodwill impairment charge from its acquistion of Somerfield in 2009, its overall losses totalled £2.5bn.
Its overall underlying profit plummeted to £210m from £297m in 2012, with its food division driving the fall, experiencing a £22m drop in profit compared to the previous year.
The group’s like-for-like food sales also dropped by 0.2% while sales in its convenience stores rose by 1.6%. It fared better in the second half with an overall 0.6% increase, with a 5.3% rise in convenience.
Throughout 2012, the Co-operative opened 32 new convenience stores while contracts for a further 32 stores that will open in 2014 were exchanged.
As well as its expanding its True North five-year value strategy, it has also pledged to open over 100 new convenience stores over the next 12 months. This continues the group’s move away from larger sites. “While we have been selling larger stores, we have also been adding new outlets that are more suited to our focus on the convenience store market,” said Pennycook.
The group did find something to celebrate in its new format stores. “In November we began the roll out of our new store formats and we have been pleased with their early performance,” added Pennycook. “Improving the look and feel of our stores is a key priority and resource continues to be applied to our new formats and the store refit programme. By the end of 2014, 75% of the food estate will have been refreshed since 2012.”