Lincolnshire Co-op reports strong year despite hit to its NHS pharmacy income

Total sales rose 3.5% to £312m with a healthy performance in food stores but trading surplus fell by £4m to £16m

Lincolnshire Co-op has reported “a strong trading year” in its annual results, but said its trading surplus was down £4m after cuts to its NHS pharmacy income.

In the society’s report for the year to 2 September 2017, it said competition has been “intense” but total sales had risen 3.5% to £312m, (2016: £301m) with an expanded market share and customer base.

But trading surplus fell to £16m (2016: £20m), “due primarily to NHS cuts to pharmacy income but also our development work, pension costs and the new dividend card roll out”. Turnover was £287m (2016: £278m) and gross profit was £94m (2016: £93.9m).

The society signed up 28,181 new members over the year, said the report, and membership now stands at 286,661.

Food stores enjoyed “another year of strong growth with sales up 6.8%, helped by both an increase in customer numbers and the average basket spend,” said the report.

The society said it had delivered a refit programme to stores to add more chilled products and food-to-go. A new food store was opened in Goxhill and  19 others have been upgraded.

“We were particularly pleased that our sales of locally sourced products increased by 22% to over £2 m for the first time,” it added. “We’re delighted that so many local suppliers are now growing their businesses by working in collaboration with us.”

The food operation also saw “the tough decision” to close two distribution centres. “We are grateful to all colleagues who helped the transition go smoothly, but particularly to colleagues whose roles were redundant as part of this process,” the report said. “We are very pleased that with our support most have managed to find alternative jobs, either with the society or other local firms.”

The report said trade at its filling stations was affected by a major refurbishment programme and the closure of one filling station. “The refitted stations are trading successfully and this refurbishment work will carry on in the new year,” it added.

At the society’s Post Offices, “income continues to fall but we have supported this service with some transformation monies received from the Post Office, as we know how important these facilities are to our communities”.

The travel business saw sales rise 10% with an increase in customer numbers and booking values.

In the society’s pharmacies, “the predicted cuts to NHS Pharmacy income, together with a further significant cut announced in July 2017, depressed income severely.

“Our pharmacies were busier than ever with growth in prescription numbers and also our other services, such as medicine use reviews, the new medicine service and all the check-ups and advice we give. This was supplemented by our health pod, which visits localities and events to bring healthcare into communities.”

The funeral division reported growth in client numbers and funeral plan sales and the major refurbishment of premises in Grimsby and Gainsborough. Two new Funeral Homes were opened in Coningsby and in Market Rasen,

Property rental income fell after the sale of a small number of properties, with some other properties left vacant “due to the large scale of our development and refurbishment programme”.

The society also opened the Boole Technology Centre on our Lincoln Science and Innovation Park, a joint venture with the University of Lincoln.

In terms of community engagement, the society has raised £663000 in support for local groups, homelessness charities, hospices and green spaces, trialled the donation of surplus food from its stores and seen volunteers help out initiatives such as library services and leading health walks.

In this article

Join the Conversation