Heart of England Co-operative Society has reported a “satisfactory year of trading during a challenging 2019” in its annual report for the year ending 18 January.
The society, which operates 35 food stores and 15 funeral homes, made investments of almost £13m and saw its turnover rise to £76.9m – up 3.6% from £74.2m the previous year.
Its operating profit was £2.7m – down slightly from £2.9m the previous year
The food division recorded sales increases of 4.5% “against a backdrop of changing customer habits and increased competition from the multinationals and discounters”.
Chief executive Ali Kurji said the rise was a pleasing result – particularly when the previous year’s sales had been helped by the Beast from the East cold spell followed by a hot summer.
The society completed a series of major investments in 2019: in January it opened a £1.8m purpose-built Food store in Burbage, near Hinckley, part of the new £4.5m Sketchley Brook Retail Development – also owned by the society.
The food division also branched into the Solihull area for the first time with the opening of a new £2.1m food store at Hockley Heath.
Both Sketchley Brook and Hockley Heath Food stores are performing above budget.
Last August the society opened a £2m, purpose-built food store in Rotherham Road, Coventry. The store has grown its sales and is expected to continue doing so.
Other projects included refurbishments at New Bilton, in Rugby; Attleborough Green, in Nuneaton; and Southam, near Rugby.
New product ranges include Cook frozen foods, vegan products and American confectionary.
The Society has also implemented Local @ Heart – a new scheme giving local producers an outlet to sell their products.
The funeral division recorded a 4% fall in sales – in line with other funeral service providers and reflecting falling death rates.
Investments included a new funeral home at Towcester in Northants and the recent opening of a new funeral home in Southam.
Sales of carrier bags over the year raised more than £27,000 for various charities in the society’s trading area, while the corporate charity scheme, in aid of Zoë’s Place Baby Hospice, raised £19,500.
Society membership, which had been reviewed to sift out dormant accounts, now stands at 157,000. All members benefit from the new Member’s Reward Card which offers a 2% discount in the food division. By the end of the financial year members had earned more than £189,000 of rewards.
In the report Mr Kurji said the business once again continued to operate with no borrowings.
He said: “Increasing sales levels, whilst carefully controlling costs, remains the best way to achieve a consistent growth in profits and in the long term maintain our Society’s outstanding level of success.
“We intend to continue with our strategy of renewing and expanding our businesses and the cash reserves we have built up will enable us to continue to do this without the need for any external financial assistance in the short term.
“In spite of the pressures we intend to maintain our unique position in the heart of England by building our reputation as one of the UK’s leading retail co-operatives by continuing to develop profitable trading activities and maintain community friendly initiatives and policies.”
He added: “In spite of the uncertain economic outlook ahead we remain optimistic about our Society’s future prospects as one of the leading independent regional co-operative societies.”
In his report – which was delayed this year – Mr Kurji said that since the outbreak of Covid-19 the society’s main focus had been protecting colleagues and continuing to provide an unrivalled service. He paid tribute to colleagues across the society for their continued hard work throughout the pandemic.
“All the society’s food stores and funeral homes have so far remained open and trading throughout the coronavirus outbreak,” he said. “The board of directors and management executive team are immensely appreciative of the hard work, dedication, commitment and the extraordinary efforts of the society’s colleagues, especially those working at the front line in our food stores and funeral business.”