Co-op boss in ‘storm’ warning
FEARS AFTER COSTS SLASH PROFIT
THE Co-op’s chairman warned “the eye of a storm” was approaching as his business revealed an 84 per cent plunge in profits.
The food and funeral group has, like other companies, been hit by the rising cost of goods and energy.
The impact meant that while half-year revenues were flat at £5.6billion, profits tumbled from £44million to £7million.
Chairman Allan Leighton, looking ahead to the second half of the financial year, said: “We know that the current testing conditions will not ease”.
But he added: “We are clear on our short-term priorities as we face into the eye of an external storm.”
Revenue from the Co-op’s convenience store arm, the biggest part of the group, edged up slightly to £3.9billion.
But profits from the division were affected by higher costs, which it said reached a 13-year high in June. The chain is ploughing another £37million into lowering the price of 120 popular products.
The Co-op’s Funeralcare arm also cited regulatory charges as profits fell.
The group, which is a mutual owned by its members, also has insurance and legal offshoots. To offset rising costs it is targeting £100million of cost savings this year, rising to £150million in 2023.
It recently bolstered its finances by announcing the sale of its petrol forecourt business to rival Asda for £600million.
Shirine Khoury-Haq, appointed chief executive in August, said: “Against a challenging economic backdrop, we have made progress in strengthening our balance sheet, whilst continuing to support the needs of our colleagues, members, customers and the communities in which we operate.”