The Co-operative Group this week hailed a "tremendous" turnaround of its food operations, as it reported strong annual sales and its fifth successive quarter of like-for-like growth.

Guy McCracken, CEO of Food Retail for the Co-operative Group, said a focus on better shops, products, service and in-store execution had paid off, with full-year like-for-like sales up 4.4% for the 12 months to 13 January 2007.

Full-year operating profit for food rose 29.2% to £92.5m on total sales up 1.8% to £3.04bn. Meanwhile, in the first quarter of this year, like-for-likes were up 7.2% year-on-year.

McCracken said the figures demonstrated the strength of the society's recovery after a difficult period. "In 2005, we reported negative like-for-like sales of 3.1% and were lagging behind the industry," he said. "The latest results are tremendous."

Five quarters of consecutive growth is a significant milestone in a company's recovery because it demonstrates growth on growth and McCracken said it was a "a momentous event".

Rebranding more than 1,000 own-label lines during 2006 and focusing on premium, health and ethics had helped boost figures, said McCracken.

The Healthy Living range, relaunched in January this year, had performed well and early results from the relaunch of its premium range Truly Irresistible were encouraging, he said.

The society was planning to double the number of store refurbishments next year, he added. The group was on track to refit 250 stores this year and in 2008 this number would increase to 500.

"We are averaging sales uplifts of 14% in refurbished stores," said McCracken. "We have focused on smaller stores in our c-store estate and the feedback we are getting is that customers like the new look, brightness and new lines."

The Co-operative Group, the UK's largest society, is in the process of merging with United Co-operatives, the second-largest. "The merger is a great opportunity to combine the businesses," said McCracken. "It makes sense because scale does matter, and not only will it improve how we operate and develop the business, it will also make the society more confident."

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