For the 28 weeks ending July 26, the group recorded a 35.6 per cent rise in operating profits to£191.1 million. Sales at the group’s food business rose 43.5 per cent to£2.4 billion, driven by store refits and range expansions. Like-for-like sales increased 5 per cent in the first half.
“In the wake of the merger of The Co-operative Group and United Co-operatives, we have made record profits,” said chief executive Peter Marks. “At the same time, we have secured agreement to buy Somerfield – a transformational deal which will cement our position as the UK’s premier community retailer.”
The group saw significant food price inflation, which it said it has tried to shield customers from as much as possible. The growth in food was generated by increases in average basket size and improvements to stores.
The retailer’s pharmacy business has struggled in the first half of the year as result of the Government’s move to reduce the amount of reimbursement to pharmacies from prescriptions. Operating profit before significant items was£13.6 million, a decrease of£3.8 million on this time last year.
“It is clear that the rest of this year and quite possibly much of next year will be tough because of the wider economic environment,” said Marks. “The credit crunch, the ongoing slowdown in the housing market, food price inflation and energy cost rises will weigh on all businesses – and our sector will continue to be as competitive as ever.”