The Co-operative Group has gained a timely boost after announcing that it had returned to profit.
In its latest trading update for the 52 weeks to January 3rd 2015, the company announced that group revenue hit £9.4 billion, a drop from the £9.7 billion in the previous year. However, profit was up to £124 million which is a significant improvement on the £255 million loss posted in its update for 2013.
The company highlighted a "robust" performance from both its food and funerals business, with same-store sales in food up 0.4 per cent. It conceded that its insurance business had performed poorly with revenue falling to £371 million, from £476 million in 2013. This created an underlying loss of £7 million in contrast to the £36 million profit a year earlier.
Its food business continued its steady progress as The Co-op pressed on with the implementation of the True North strategy, a focus on the convenience market. Like-for-like sales were up by 0.4 per cent overall and 3.2 per cent in the core convenience estate. Underlying profits grew by 1.5 per cent to £251 million. It also created 82 new stores and refurbished a further 700.
Richard Pennycock, chief executive of The Co-operative Group, said: "We made solid progress in 2014 as we successfully concluded the rescue phase of our turnaround. The hard work of rebuilding The Co-operative Group for the next generation, and restoring it to its rightful place at the heart of communities up and down the UK, is now underway."
Maintaining food market share
While many of the big four supermarkets have been struggling, The Co-op has stood firm and currently boasts six per cent of the market share. However, it will be wary of the emergence of discounters Aldi and Lidl which are gaining ground, the former recently overtook Waitrose to become the UK's sixth largest grocer.
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