Sales and operating profit up for half-year at Midcounties Co-op

Chief executive Ben Reid said performance was 'ahead of plan' with 'very positive sales increases in our Food, Travel and Energy businesses'

Midcounties Co-operative has announced “strong progress” in its interim results for the six months to 29 July, with gross sales up 16% to £747.2m.

Operating profit before significant items was £5.4m, up from £5.3m for the same period last year.

Chief executive Ben Reid said the performance was “ahead of plan” with “very positive sales increases in our Food, Travel and Energy businesses”.

The society reported a strong performance in food despite “difficult trading conditions” with like-for-like sales up 2.3% on last year and convenience trading up 3.5%.

Developments include a new convenience store in Rissington, Gloucestershire, while a new supermarket in Bourton-on-the-Water is due to open later this year.

Chief executive Ben Reid

Other stores have been refurbished and the society is trialing new ways of working, including self-scan checkouts, movable racking, and a new workforce management system to better align working hours with customer flows and task requirements.

At travel, gross sales rose by almost 9% compared with last year, with foreign currency sales increasing by 12%.

Midcounties says it is improving its online service and is revamping its travel stores, while its focus on cruise holidays saw it win the Rising Star Award from Celebrity Cruise. The society is also preparing to launch a new Business Travel division.

The Energy division took on customers from failed supplier GB Energy at the end of last year, through Ofgem’s Supplier of Last Resort mechanism.

“The process has gone smoothly with a higher proportion of GB Energy customers remaining with the business than expected,” the report said. “The acquisition takes our customer numbers to 390,000 and our half-year sales to £210m.”

The society is rolling out smart meters and pledged to ensure that at least 75% of its energy mix is from renewables by the end of 2018. The current mix is 54%.

The Pharmacy division has suffered due to government funding cuts but a new Patient Medication Record has improved efficiency and services, says the report. A new web platform will be launched later this year, combining all its online services in one place.

Funerals had a strong first half of the year, conducting 3,838 funerals, an increase of 3.6% on the same period in 2016.

The society is rebranding its Childcare arm, which recently acquired First Steps nurseries, and all its nurseries continue to be rated Ofsted Outstanding or Good.

Midcounties says it recruited over 31,000 new members over the period, bringing its total membership base to 673,000.

“We have also been developing ways to engage with our membership base digitally,” said the report, “including launching a member app and streaming our AGM live for the first time. We had nearly 600 members in attendance at the event and almost 100 more viewing online.”

When it comes to community impact, the six months saw customers, members, and colleagues collect 20,000 products for food banks and raise £20,000 to support victims of the Grenfell fire, helping the society gain a five-star rating in Business in the Community’s Responsibility Index with a score of 100%.

The society has cut carbon emissions by more than 500 tonnes through ongoing energy saving activity in the first half of the year.

Mr Reid said: “We have continued to invest in our businesses with new developments and initiatives, both co-operative and commercial, to support our longer-term plans.

“So, a very satisfactory start to the year. However, trading conditions continue to be challenging, and the business environment as a whole remains uncertain given Brexit.

“Competition is fierce, particularly in Energy and Food, our two biggest businesses, and, in particular, we have seen higher levels of food inflation coming through. Our forecasts indicate a more challenging second half of the year.

“But the society is well placed. We have great, committed colleagues, a range of businesses and, of course, the strength of our co-operative model to support us as we go forward.”

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