The Co-op returned to profit in 2017 on the back of strong food sales and the growth of its wholesale business. 

Co-op said pre-tax profit recovered to £72m in the 12 months to March 31, compared with a £132m loss in the previous year, reflecting, it said, a writedown of a stake in its banking division.

On an underlying basis, pre-tax profits grew 25% to £65m during the year.

Overall sales remained flat at £9.5bn.

The grocer, which is in the process of acquiring Nisa, said like-for-like food sales grew 3.4%, while core convenience like-for-likes rose 4.3%.

Total food sales were flat at £7.1bn, due to its recently implemented strategy of closing large stores.

At its wholesale arm, revenues surged 7% to £1.7bn in the year that it also signed a supply deal with Costcutter.

Co-op chief executive Steve Murrells praised the progress made.

He said: “Today’s results show how much progress we have made. All our businesses have performed well and we have increased profits and reduced debt, while continuing to invest for colleagues, members and customers.”

Independent chair Allan Leighton used the occasion to highlight the Co-op’s social purpose.

He said: “[We] will remain true to our social purpose and continue to make the right decisions and campaign on the big issues where business really should have a voice.”

In 2018, the retailer plans to open 100 new convenience stores and invest £50m in prices.