Lower costs help Co-op return to profit

The Co-op said this morning that lower costs had helped the company return to profit in the first half of its financial year.

Profit before tax grew to £58m in the first half of 2024 from a loss of £33m in the same period last year.

The company, which also operates a funeral service, legal services, and insurance firm, said revenue increased by 1.5 per cent in the first half of 2024 to £5.6bn from £5.5bn. 

It said the rise was “notwithstanding challenging external headwinds and contraction in the wider food retail convenience market.”

The firm said lower interest payments and strong Funeralcare pre-planned investment returns drove the change.

Net debt shrank by £55m, from £97m to £42m.  Net debt has fallen by 95 per cent since 2021, the company said.

The company also recorded a 20 per cent growth in number of active member-owners to 5.5m and said it is firmly on track to hit 8m members by 2030.

It said it had provided £130m of support provided to colleagues, members and communities in the first half of the year.

The support included investment in colleague pay (£48m), colleague discount (£18m), lower food prices and member offers (£55m) and supporting communities (£9m).

Earlier this year, data from Kantar showed that Co-op and Asda were the only two UK grocers to have lost market share in the second quarter of the year, although separate Circana analysis found that in convenience Co-op’s performance was “significantly ahead” of the market.

Shirine Khoury-Haq, the Co-op’s chief executive, said, “We have delivered a strong performance for the first six months of this year as our strategy starts to gain real momentum.   

Although the external environment remains challenging, it is testament to the underlying strength of our Co-op that we have outperformed in all our markets while significantly increasing our investments in our colleagues, pricing and in the growth of our businesses.

“While there is much more for us to achieve, we are on track to reach our goal of 8 million Co-op member owners by 2030.  This confidence is supported by a strong balance sheet, a clear business strategy, a compelling vision, and 55,000 amazing Co-op colleagues who are central to our achievements over the last six months.”