The Co-operative Group has reported profits of £393m for the year ending January 10, 2009, an increase of 11% compared with the previous year.

The group had a successful year for total sales - breaking the £10bn barrier for the first time.

Like-for-like sales for food excluding fuel for the year were up by 5% and total food sales reached £4.5bn, up 23.1%.

Chief executive Peter Marks said: "Our food business has gone from strength to strength, driven by successful store refits, product relaunches and improvements to service levels and pricing. The deal to buy Somerfield will transform that business, making the Co-operative the fifth major player in the grocery market and ensuring we can offer our customers great choice and value in community stores."

Southern Co-op is to introduce a franchise scheme allowing independent retailers to operate under the Co-op group banner, with about 100 stores planned in its trading area. Southern joined other regional Co-ops in adopting the Co-operative fascia earlier this year.