East of England Co-op has announced an underlying trading loss of £5.5m for the 53 weeks to 28 January, but says it also became the fastest-growing co-operative in the latter half of 2022, with the biggest volume turnaround.
In its annual report, the society adds that after a challenging year that brought a huge rise in operating costs, it is “remaining positive about the future and embarking on an ambitious plan” to grow the business.
CEO Doug Field said: “These are challenging times for us, but our family of businesses remain fundamentally sound. We’re the fastest growing co-op, with sales that have grown by 8.3% more than last year to £377.5m, even when accounting for it being a 53-week trading year.
“Our trading losses are driven by factors affecting businesses nationally and globally. Our energy costs increased by over 70% when compared to last year, which reduced our profits by close to £4m. Other notable cost pressures were the 6.6% rise in the National Living Wage in April 2022 and the cost of delivering goods to store.
“In the face of these challenges, we’re embarking on an ambitious and exciting plan to grow our business to build it even stronger for the future, with a number of new Food stores in new locations in the pipeline.”
Speaking of the society’s work supporting communities across East Anglia, Field said: “We’re proud to be a different kind of business and to be weathering this storm, as we have time and time again throughout our long history, alongside the community we serve in the East of England.
“Many of the challenges we face as a co-op are also being felt hard by our communities. Supporting our communities is at the heart of who we are as a co-op and through these hard times we’ve remained committed to making a positive local impact.
“In 2022 we awarded over £200,000 to a diverse range of local groups focusing on everything from community action and food justice to mental health and wellbeing.
“In December, with rising energy costs and huge demand on foodbanks predicted, we donated an additional £100,000, diverted from our Christmas marketing budget, to helping people in the region keep warm and fed. In a fantastic example of how our community comes together to support each other in times of hardship, our customers added to this total by donating nearly £15,000 in-store over the winter months.
“We’re also doing what we can to support our colleagues through the challenges of the ongoing cost-of-living crisis. This winter, we were proud to be able to offer all our colleagues £50 in vouchers to spend in our Food stores, while also increasing our colleague discount from 20% to 25%. This is in addition to several new, long-term benefits such as partial salary advances to help with unexpected bills and expenditure.”
Looking ahead to the rest of 2023, Field said: “One of my key tasks this year is to deliver on the huge potential our co-op has as we face yet another challenging year, with increasing costs, especially when it comes to energy, being a key factor.
“We need to be doing the best we can, where we are, with what we’ve got. To get us back into profit and address the challenges we face we’re going to focus on growing and evolving our business to make it even stronger for the future: opening new Food stores and investing in our Funeral business. In addition to this we’ll be building on the success we saw in the latter half of 2022 and continuing to grow our sales.
“We also need to simplify what we do and operate for less to address the continual rise in costs.”