The Co-op Group has reported an underlying operating loss before tax of £15m for the 26 weeks to July 3, down from a £56m profit in the same period last year.
Pre-tax profit was £44m, down from £71m, and total Group revenue was £5.6bn, up £0.2bn or 4.2% against pre-pandemic levels, with growth across its Food, Legal Services and newly launched Insurance business.
The Group said the underlying loss is “due to planned investment in our colleagues and our business, as well as significant costs, impacts on sales and profit erosion related to product availability issues and the ongoing effects of Covid.”
It added: “The unplanned supply chain challenges and ongoing Covid costs will bring greater levels of uncertainty. This will in turn apply pressure on our prior expected level of profitability for year end.”
But CEO Steve Murrells said: “Our underlying profitability is generally back end loaded to the second half of the
year, in our main retail businesses.”
As the report was released, Mr Murrells repeated calls from the retail sector to have heavy goods vehicle (HGV) drivers added to the shortage occupation list so foreign workers can help plug the gap.
He told Reuters: “This won’t be solved in isolation, this is a global issue where the supply chain has completely broken down.”
The Group added that more than £15m of value was given to members through their cards, after buying selected products and services across the group, as well as personalised offers and rewards.
It said £3.5m was distributed in interim payments to the current round of 4,500 local causes from its Local Community Fund. More than £2.8m was raised by colleagues, customers and members for our charity partners Mind, SAMH and Inspire, taking total to £5.5m by 3 July.
Other highlights include the launch of a ten-point climate plan launched, including a commitment to match pricing of own brand plant-based ranges with meat-based equivalents, to support sustainable and more balanced consumption.
Capital expenditure of £161m included 53 store refits and 33 new stores.
The Group says it also introduced the Real Living Wage for all colleagues, with an additional investment of £17m in first half of the year to support our colleague population.
It invested £26m in food prices, and £6m into reducing prices for funerals and funeral plans.
Mr Murrells said: “Underpinning all of our efforts over the last six months has been our ‘Co-operating for a Fairer World’ Vision, which drives forwards and connects all our priorities.
“In focusing on creating a fairer world for our colleagues, communities and the planet we have been able, as this report will highlight, to make good progress across all of these areas.
“At the same time, and with the vaccine and easing of government restrictions starting to provide more ground for optimism, we have continued to invest more into our business, to ensure that our Co-op is both fit for the future and capable of meeting the changing needs of millions of Co-op customers and members.”