Heart of England Co-op reports operating profit of £2.9m and a rise in sales

The society hailed a strong performance in its food division despite tough competition and Brexit uncertainty

Heart of England Co-op has reported a rise in sales despite “one of the most challenging and difficult years in recent times”.

The society, which operates a network of 32 food stores and 13 funeral homes in Coventry, Warwickshire, south Leicestershire and Northamptonshire, saw a 3.45% rise in turnover in the year ending 19 January, to £74.2m.

But operating profit fell to £2.9m, down from £5.5m the previous year, its annual report revealed.

The co-op’s net worth increased by 12.9% to more than £46.2m.

The society said its food division had performed strongly in a fierce market, against stiff competition from multinationals and discounters. Sales were helped by a cold winter, a hot summer and England’s success in reaching the World Cup semi-finals.

Recent investments in both the Barwell and Market Bosworth stores resulted in both performing above budget, the society added, while the Long Lawford and Meriden food stores  recorded double digit sales increases.

Long Lawford was rebuilt in early 2017 while Meriden was extended in the summer of that same year.

The strong performance has continued into 2019 with food sales up by almost 6% in week nine, says the retailer.

The funeral division recorded a minor decrease of 0.66% in like-for-like sales over the same period, against a strong performance in the two previous years, and reflecting a fall in the number of deaths.

In the Food division the sales of 5p carrier bags over the 52 weeks helped raise more than £54,000 which Heart of England distributed among various charities. The society also presented a further £16,000 to corporate charity Zoe’s Place Baby Hospice.

Related: Interview with Heart of England’s Ali Kurji

Chief executive Ali Kurji said: “Consumer confidence remains at an all-time low due to a great deal of uncertainty about the economy and the slow progress over Brexit negotiations.

“This has been further compounded by the recent increase in interest rates, which will inevitably add further pressures on retail prices.

“We face an extremely challenging and very uncertain 2019 and all the economic indicators are pointing towards a slowdown in the economy as it appears to be losing momentum amid Brexit concerns.”

Mr Kurji added: “Despite the challenges we had a satisfactory year … The policies put in place are being successfully implemented and will help to create a strong regional co-operative business which will withstand the economic challenges ahead.”

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