East of England Co-operative has reported a slight decrease in turnover, attributed to difficult market conditions and a focus on the long term.
East of England is the largest independent retailer in East Anglia with over 200 trading outlets across Norfolk, Suffolk and Essex. The society’s annual report shows a 0.9% decrease in turnover, although profits before tax and distributions are up £3.3m to £7.8m.
Our focus has been to ensure the long-term prosperity of our business, investing over £15m to improve our business
The report also revealed that underlying trading profit dropped to £3.8m from £4.3m the previous year. However, members’ funds saw an increase of £16.2m to £233.1m.
Doug Field, joint chief executive for the East of England Co-op, said: “This year our focus has been to ensure the long term prosperity of our business, investing over £15m to improve our business and taking a number of difficult decisions.
“Looking to enhance the overall shopping experience for our members and customers, this investment included the refurbishment of 46 stores, the opening of four new food stores and 10 new post offices.
“Extending our offering to our members and customers, we also entered into new retail partnerships with Subway, Brantano and others, as well as expanded our trading area with new optical branches in Chelmsford and Braintree.”
Food sales across the society dropped by 1% – the fall attributed to the permanent closure of some stores, and the temporary closure of others for refurbishment. East of England reports that the majority of the stores refitted are now seeing improved sales.
The co-operative’s petrol stations saw sales decrease due to the falling price of fuel, and sales at distribution centres dropped 2.2%, a consequence of the challenging food retail market.
However, East of England’s travel business grew 19.5% with sales close to £5m. The society’s property portfolio brought in a 3.4% rise in income and funeral service sales grew 4.8%.
Mr Field said: “This year’s sales growth was supported by the opening of 14 new funeral branches across the region as part of our plans to maintain and grow our market share. We now hold £35.9m of pre-need funerals which support the future growth of this area of the business.
“Our funeral business strategy not only focuses on new branches but has also seen us refit parts of existing food stores to create entirely separate funeral branches – ensuring we’re making the very best use of our property portfolio.”
One of the big successes detailed by the society is its ‘Sourced Locally’ initiative, which saw a further 15% increase in sales. Stores now stock over 2,400 different products from 140 suppliers across the region, including beer, bacon, honey and heat logs. Since its launch in 2007, £45m has been reinvested in the community thanks to the scheme.
Mr Field concluded: “Our performance this year has been underpinned by the continued hard work of our dedicated and professional colleagues.
“There is no doubt that 2016 is going to be a tough year, with the introduction of the National Living Wage and the removal of tax breaks for purchasing green energy. The new business tax for apprenticeships is also an additional cost in the future that’s beyond our control.
“However, we are committed to the continuation of the refurbishment of our existing stores, with the expansion of our funeral business also a key area of focus for the year ahead.”