Co-op’s underlying pre-tax profits slumped in its first half as the group invested in its member reward scheme and earnings fell in its insurance business.
Co-op’s underlying pre-tax profits slumped 48% to £14m in the 26 weeks to July 1 as the group ploughed cash into its businesses and rewarded its members.
The group said it invested £35m in rewards for members and local causes, as it strives to champion a “better way of doing business”.
Earnings were also dented by falling profits at its insurance arm.
Including a number of one-off and non-trading items, Co-op said pre-tax profit spiked 47% to £25m.
Its half-year sales were flat at £4.6bn.
At its food business, like-for-like sales rose 3.5% – marking the retailer’s 14th consecutive quarter of like-for-like growth, while underlying operating profit edged up 3% to £65m.
In its core convenience arm, like-for-likes increased 4.5%.
Reported food sales slipped 1.2% to £3.48bn – 0.7% when excluding sales from the 298 stores sold to McColl’s during the first half of the year.
During the period, in addition to opening 34 new food stores, the grocer became the only supermarket to use British meat in all its sandwiches and pork pies. This, it said, drove a 6% jump in like-for-like British meat sales.
Co-op appointed Jo Whitfield to head up its food business earlier this year and, last month, entered into talks to acquire c-store chain Nisa.
The group’s recently appointed chief executive Steve Murrells said: “Championing a better way of doing business for our members and their communities is what the Co-op is all about and I’m delighted that we are really starting to deliver on that purpose.
“Since we launched our member reward scheme in September 2016, more than 1.1 million people have signed up to join the Co-op.
“As a result we’ve been able to give £35 million back to our members and their communities over the first half of this year, a conscious decision to share our success with our members and the 4,000 good causes which mean so much to them.
“We can do all this because our businesses have continued to perform in the face of challenging markets.
“Food has posted a 14th consecutive quarter of like-for-like sales growth, Funeralcare continues to lead the market on the back of the launch of our Simple Funeral offer and our Insurance business continues to lead on making driving safer for the young.
“Across our business we are also maintaining our commitment of re-investing for the future success of our Co-op.”