Profits at Heart of England Co-operative fell 63% following what it called “one of the most challenging and difficult years in recent times”.
But the society, which trades in the West Midlands, Warwickshire, Leicestershire and Northamptonshire, reported gross sales of more than £75.7m for the 52 weeks to January 2017.
This represents a decrease from £92.2m the previous year due to the closure of the society’s loss-making non-food division, said its annual report.
Operating profit after exceptionals also went down from £4.6m 52 weeks to Jan 2016 to £1.7m for 52 weeks to Jan 2017. Group turnover was £70m, a decrease of 15.4% on previous year. The co-op said the results were determined by a tough retail environment due to competition from discounters, low consumer confidence, and uncertainties led by a weakening pound.
The society continued to operate without borrowing and invested a total of £1.7m on new projects during 2016, mainly focusing on refurbishment and opening news stores.
The food division recorded a like-for-like sales of 0.15% for the period, mainly coming from convenience stores, which saw an increase of 1.48%, while larger stores were impacted by local competition. During the year all food stores underwent a complete product re-range.
The funeral division witnessed an increase in sales of 5.2% on a like-for-like basis, despite a fall in the death rate both regionally and nationally. Over the year the society served more than 2,300 families, reflecting its busiest year since 1999.
The society raised more than £12,000 on behalf of charity Guide Dogs during the year, an amount that was topped up from the sale of carrier bags making a total donation of £25,000.
Chief executive Ali Kurji said a strategy of increasing sales levels while controlling costs remained the best way to achieve consistent growth in profits and ensure long-term success.
He added: “We intend to continue with our strategy of renewing and expanding our business and the cash reserves we have built up will enable us to continue to do this without the need for any external financial assistance in the short term.
“In spite of these pressures we intend to maintain our unique position in the heart of England by building on our reputation as one of the UK’s leading retail co-operatives by continuing to develop profitable trading activities, and maintain community friendly initiatives and policies for the benefit of our members.
“Amidst an uncertain economic outlook, we remain optimistic about our society’s future prospects as one of the leading independent regional co-operative societies.”