Midcounties Co-op has announced an operating profit of £3.7m for the six months to 29 July, down £0.5m on the same period last year.
In its report, the society says this drop is offset by a one-off benefit from lottery grants in Childcare, worth £0.7m, which buoyed the 2022-23 result. “Excluding this, the performance on an underlying basis saw an increase of £0.2m,” said CEO Phil Ponsonby. “These results are testament to the hard work of all our colleagues.”
Other figures for the six months show the society made gross sales of £773.2m up 14.2% on the same period last year. Coupled to a strong performance from the co-op’s travel division, revenue increased by 16.7% to £426.1m.
Gross profit was £110.6m, up £4.5m (4.3%).
“We have invested significant capital into new sites, new systems and carbon reduction technologies,” said Ponsonby. “As such, we have increased net debt to £37.0m versus £31.2m last year.
“These investments are already showing positive results, both in terms of improvements in financial performance and impact on energy reduction.
“Our food business has performed well in the first half year with like-for-like sales growth of 7%. We have opened three new stores this year and also exited three stores that no longer fit our business model, freeing up resources to invest in our convenience and Food Markets models.”
Pressures on the food division include the rising levels of crime which affect the whole retail sector. In response, Ponsonby said the society has invested over £1.6m in safety devices, security monitoring and preventative measures across its network since it launched this project last year.
“I am also discussing what can be done to tackle this issue with senior local law enforcement representatives and our trade union USDAW,” he added.
As for Midcounties’ other businesses, travel “had a very strong start”, with gross sales up 26% on last year and 85% higher than the first half of 2019 (pre-Covid). The co-op is working to diversify its Co-op Holidays offer, said Ponsonby, expanding the number of destinations and packages available and investing in a new website to give customers an “even smoother” booking experience.
Childcare saw year-on-year gross sales rise 6.8% and occupancy increase from 70.6% to 73.5%. New developments at Wolverhampton and Warwick are planned to open in the second half of the year.
The utilities arm “has been focusing on sustainability by promoting climate positive broadband and ethically made Fairphone products, including the launch of Fairbuds XL headphones in May”, said Ponsonby. “To support members, the team has also been working closely with our suppliers to keep prices down.”
Sustainability efforts include a 12% cut in energy use compared with the same period last year, saving over 500 tonnes of CO₂e, says the report, and the society continues to lobby on issues such as modern slavery and food justice.
“For the rest of the financial year,” said Ponsonby, “we will be focusing on embedding the new membership initiatives we have launched this year and giving members every reason to shop with us and use our services.
“As the colder months roll in, there will once again be added pressure on members’ spending and our own business operations as energy bills increase. We will continue to prioritise providing great value for our members on everyday
essentials, as well as helping those in our communities who need it most.”
The society has “exciting plans” to return more of its profits to local communities, with members given more say in how this money is distributed, he added. The new programme will launch in May 2024.