United Co-operatives' sales and profits rose in the first six months of the year, but the society faces a tough six months ahead in the face of intensifying competition in the market, according to its chief executive.

Figures for the 26 weeks ending 29 July reveal that United's food sales for the half year rose 16% to £507m, with like-for-like overall food sales growing by 5.4%.

Chief executive Peter Marks said: "We've been working hard on our food development and have invested significantly in our business over the last six months. We have done a lot of refurbishment to our stores and have improved our customer offer and availability and our sales show we're doing the right thing."

But he added: "The next six months are going to be challenging for us but we're confident in our strategy and we're confident it will be another good half year. But it will be tough, no doubt." Marks said a number of new stores would be opening over the next six months but said United

Co-operatives was still reviewing its Perfect Store format, previously launched at Bradwell, Newcastle-under-Lyme in November 2005, and had opened five more stores in the format.

"It's still in the laboratory stages," he said. "We're playing around with it. We're rolling it out slowly."

Meanwhile, United

Co-operatives has signed a six-figure deal with digital agency Alphabet Soup to create software for its till point screens.

The software will be

rolled out to stores in November and will allow United Co-operatives to show commercials on screens to customers as they are paying for shopping.

The ads can be tailored

to allow a run of executions that are specific to each individual store and feature third party brands.

In February the Co-operative Group announced

that it had activated new advertising screens at its tills (The Grocer, 11 February, p10).

So far Cadbury, Smirnoff and Tryton Food, makers of Aunt Bessie's, have run adverts on the screens.

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