Trading profit falls at East of England Co-op after robberies increase security costs

Sales and pre-tax profits were up at the society which said it had invested significantly in the business

The East of England Co-op has reported a drop in its underlying trading profit from £4.4m to £4.2m, partly because ATM ram raids and robberies has forced it to spend more in security.

But profit before distributions and taxation rose to £6.6m, from £6.1m the previous year, said the society in its results for the year to 27 January 2018.

The retailer, which has over 230 trading outlets across Norfolk, Suffolk, Essex and Cambridgeshire, said turnover has increased by £5.9m to £353.6m and members’ funds were up from £207.5m to £212.5m. On a comparable 52-week basis, sales rose 3.7%.

But it added: “Disappointingly, underlying trading profit has fallen since last year by £0.2m to £4.2m. This change reflects the rising costs of doing business, and our decision to significantly increase our investment in safeguarding measures for in-store colleagues in the wake of recent robberies on retailers in the region.”

The society said it was working with union Usdaw on its Freedom From Fear campaign, and its security team had held interactive roadshows across East Anglia to help tackle anti-social behaviour.

“Throughout the year our anti-social behaviour officer Scott Walker has also been working with young offenders convicted of committing crimes in stores,” it said. “This restorative justice programme offers youth offenders the opportunity to spend a day with Scott. They are shown the impact of their actions upon colleagues and customers, before looking at their skill set with the aim of putting them on a more positive path.”

However, trading profits were up across the society’s food, funerals and property businesses.

The society said its food business saw a 17% growth in profits, with a 2.3% like-for-like increase in sales on a comparable 52 week basis. New food stores in Acle and Harleston replaced existing smaller stores in those towns.

It opened 11 new funeral branches across the region, including a second branch in Cambridgeshire.

The society’s property portfolio has also continued to grow in value, with housing developments completed in Colchester and Dovercourt contributing to a 5.2% increase in investment property income.

Joint CEO Doug Field said: “It has been a year of significant investment in the business and next year we will continue to reap these awards while addressing the challenges ahead.

Doug Field
Joint CEO Doug Field

“Our success in recent years is in part due to ensuring that we have the right stores and branches in the right places. Consistently high colleague engagement, good operational standards, our store refurbishment programme and investment in technology has contributed towards an increase in sales.

“We will continue to offer our apprenticeship programme, which has seen 100% retention rates with many graduates going on to higher level education and management opportunities within the business, retaining local talent for the future.

“Leading the agenda on food waste, we will also continue to develop our Co-op Guide to Dating initiative to save more food from going to landfill, as well as proactively looking at new ways to reduce single use plastics in our stores.”

As East of England celebrated 10 years of its award-winning Sourced Locally initiative, sales continued to rise with over £17.6m of produce sold in 2017, bringing the total amount ploughed back into the local economy over the past decade to £62m.

Related… Leaving no one behind: small producers in the East of England

The report warned that market conditions remain challenging, with the rising costs of doing business including the National Living Wage and rising inflation, but Mr Field sounded a confident note.

He said: “Over the coming year we will continue to focus on the three cornerstones of our business; food, funeral and property, while growing and reshaping our co-op to ensure long term success.

“We will continue our successful food strategy, looking for new stores and continuing our refurbishment programme of existing stores. Our funeral services have expanded rapidly and we will look to establish new locations over the coming year. While investment in our property estate will continue, with new developments planned for 2018.

“We will continue to run the co-op as it should be; working for our communities, members, customers and colleagues. With a strengthened estate, dedicated colleagues and a healthy balance sheet, we have much to look forward to in the coming year and beyond.”

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