Co-op profits climb driven by cost-saving efforts

For the 26 weeks to July 1, 2023, the grocer reported a £0.2bn decrease in revenues to £5.4bn, while underlying EBITDA was up £27m to £226m.

Underlying operating profit at the Co-op during the period was also up £44m to reach £43m, up from a loss of £1m during the same period in 2022.

The Co-op credited its increase in operating profit to annualisation of £101m cost savings achieved in 2022, as well as further cost savings during the first half of this year as it streamlined operational processes.

During the first half,  the grocer also reported a 55% increase in new members, which it said was “ahead of expected progress”.

The Co-op said its £20m investment in lower pricing across key food lines during the first half, as well as an additional £70m investment announced in July, demonstrates the retailer’s support of members and communities during the cost-of-living crisis.

In terms of outlook, the retailer said it was confident and excited about the future, despite the persistence of “turbulent economic headwinds” and inflationary pressures.

It added that it will continue to prioritise support for customers and staff and that costs as a result are “expected to dampen profitability in the short-term”.

Chief executive Shirine Khoury-Haq said: “I am very proud of our success over the last six months, particularly given the prevailing economic and market conditions. This performance wouldn’t have been possible had we not taken the decisions we did, as early as we did in 2022, when it came to better management of our members’ money and running the business more efficiently.

“While the economic environment remains challenging, we have again improved our underlying financial strength, significantly grown our membership base and delivered more for our members and their communities.

“We have done this while staying true to our Rochdale Principles, co-operating through partnerships and campaigning on topics that matter to our members most. We have invested heavily in supporting our members, communities, colleagues and customers through the cost-of-living crisis, and we will continue to do so.

“The business momentum established in the second half of the last financial year has carried through into the first six months of 2023 and has allowed us to significantly strengthen our membership offer and proposition – we have put our member-owners at the heart of what we do. We have listened to what they need and we have not hesitated in our response.

“While there remains much for us to do, I’d like to thank all of our colleagues for their hard work in the first six months, which is delivering meaningful benefits for our members and their communities.”