The Co-op Group’s annual results see it back in the black, as it announces a new plan for ‘Stronger Co-op, Stronger Communities’.
Published on Friday, 6 April, the results show a profit before tax of £72m for 2017 (2016: loss £132m), and an operating profit of £126m (2016: £148m). Stripping out one-off items, the underlying profit before tax was up 25% to £65m (2016: £52m).
Since its rebrand and the relaunch of its membership offer in 2016, the Group has seen 1.2 million new members join up, and its active membership increase by 15% to 4.6 million. Through the ‘5 and 1’ scheme, Group members received £61m in personal rewards in 2017, with £13m earned for over 8,000 community projects.
“Today’s results show how much progress we have made,” said chief executive Steve Murrells.
“All our businesses have performed well and we have increased profits and reduced debt, while continuing to invest for colleagues, members and customers.”
Overall, revenues remained stable at £9.5bn (2016: £9.5bn) and debt was reduced to £775m (2016: £885m). Food core convenience like-for-like sales were both up (3.4% and 4.3% respectively), with wholesale sales to independent societies up 7% to £1.7bn. Funeral and Life Planning revenues were up 4% to £343m and Insurance gross written premiums were up 3% at £496m.
Stronger Co-op, Stronger Communities
Mr Murrells believes the organisation’s success “shows that the Co-op’s difference really resonates today”.
“We’re delighted with our performance, but we’re hungry for more and ready to create the Co-op of the future,” he said. “That is why we are launching the Stronger Co-op, Stronger Communities plan. To really succeed as a Co-op we need to be even more successful commercially and our community efforts need to be concentrated on the things that matter to people.”
He added: “It’s widely recognised that making communities stronger and more resilient is an urgent priority for the UK. Our member-owned business, our heritage, and community presence makes us uniquely placed to play a significant role in that work. Making this happen will be the outcome of our plans.”
The Stronger Co-op, Stronger Communities plan aims to “create the Co-op of the future”, driving growth “by creating a more commercial Co-op and sharing the greater value created with members and their communities”.
The Group highlighted that the plan would focus on: greater interconnection between business areas; serving customers and members; convenience and relevance; and ventures in new markets with an “agile, capital-light, digital-first approach to disrupting markets”.
In support of the plan, the Group says it has already begun a number of initiatives in 2018, including a £50m investment to reduce prices announced in January 2018, expansion of convenience store estate, and working with independent retailers to grow their businesses through the provision of Co-op own-brand products. In Funeral & Life Planning, the Co-op will continue to hold funeral prices and help tackle funeral affordability. And a new “Co-op ventures programme” has been created; currently looking at initiatives in health and money.
With significant investment being made in the Stronger Co-op, Stronger Communities plan, the Group says it is not expecting any surplus profits being available for distribution during 2018.
Allan Leighton, independent non-executive chair of the Group, said: “We are stronger than ever before and ready to create a new, modern Co-op that is fit for the future. As we do that, we will remain true to our social purpose and continue to make the right decisions and campaign on the big issues where business really should have a voice.”
Mr Leighton also acknowledges the news that the Groceries Code Adjudicator is investigating some of the Group’s practices related to suppliers.
“We need to live our values in our dealings with suppliers and we know we’ve fallen short,” he says. “We’ve already been taking action and have a dedicated team making sure we have great supplier relationships. This area has great focus from our board and we’ll make sure you can be proud of our practices in the future.”
- Read the full Co-op Group annual report here.