The Co-operative Group has announced 3.1% first half like-for-like sales growth in its Food business, driven by the performance of its convenience stores.
In its interim results for the 26 weeks to 2 July, the group’s core convenience estate reported sales growth of 4.3%, with the Food business experiencing its sixth consecutive quarter of like-for-like sales growth.
However, the group’s pre-tax profits more than halved from £36m to £17m due mainly to its rebuild investment, pay increases to frontline staff, and food price cuts. Overall revenue increased by 2.2% to £4.7bn.
Over the six months the Co-op opened 30 new Food stores as part of the 100 planned in 2016, and purchased 15 Budgens stores and eight My Local stores.
It also sold 298 smaller Food stores - which fell outside of its core strategy - to McColls for £117m.
Co-op chief executive Richard Pennycook said the group remained firmly on track with its rebuild plans.
“Revenues across the group have grown and, in line with our strategy, profitability has fallen due to our major Rebuild investment, pay increases for our people and price cuts for our customers,” he commented.
“We are able to invest for the long-term, strengthening the appeal of our products and services, because our business model allows us to pursue our unique approach, championing a better way of doing business for customers and communities.
“This long-term approach is evidenced by the continued reshaping of our Food store portfolio to support our own-brand, convenience-led strategy. This means we can, as necessary, forgo sales growth in order to ensure we have the right stores in the right places for our customers.”