The Co-operative Group, the nation’s fifth biggest supermarket, released its full-year results this morning.
Even though it reported a 5.8% drop in group profits and a 1% drop in group sales - as well as a 2.1% fall in like-for-like food sales for the year to 31 December - the press has gone to town on the society’s bid to take over 632 Lloyds bank branches.
The deal would be a real boost for The Co-op Group if it pulled it off, but all the excitement has let the society off the hook for its lacklustre numbers.
Everyone knew the Co-op Group’s food results were going to be disappointing. Data from Kantar Worldpanel released earlier this week showed a 2% drop in sales for the 12 weeks to 18 March. And the month before, they were down 2.2%.
Co-op Group CEO Peter Marks blamed the fall partly on “the toughest economic backdrop I have seen in more than 40 years in business”, but also on the ongoing modernisation of its food business, which led to a 20% drop in food profits to £309.4m. This modernisation, Marks said, was crucial “to ensure its stores are right for the customer with new products developed to meet changing customer needs”.
The society has certainly been busy on the investment front. It has recently invested in “remodelling its supply chain, infrastructure, systems and processes to improve availability on a consistent basis,” according to Marks.
And there’s no let-up. Next week, the society will trial contactless payment in four Manchester city-centre stores, and will upgrade 125 stores within the M25 to contactless-enabled Chip & PIN next month.
In fact, The Grocer recently caught up with Peter Marks, who gave us the lowdown on the society’s modernisation plans, as well as acting food CEO Sean Toal, who revealed his plans to push the Co-op’s new value message.
You can read all about it in our next issue, out on Saturday.
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