Co-op Group has reported a widened underlying operating loss of £45 million in the first half of the year, up from £32 million in the same period last year. This loss occurred despite a 2.6% increase in revenue for its food business, which reached £3.7 billion in the six months to July 4.
Co-op invested in new stores, refurbishments, and discounts, opening 42 new locations, including franchise and “sustainability showcase” stores. They also expanded their quick commerce offering to 90% of stores, achieving 24% sales growth in this area.
Across the wider Co-op Group, which includes insurance and funeralcare businesses, revenue increased by 2.4% to £5.6 billion. However, the underlying operating loss widened due to challenging market conditions and low consumer confidence, particularly in food retail.
Kate Allum, Co-op’s interim chief executive, stated that the first half of the year was marked by difficult markets and low consumer confidence. She noted that the decision to invest in promotions and stores had a short-term impact on profitability.
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Co-op’s focus on convenience and top-up shopping, highlighted by its Pop to Co-op campaign, has driven sales growth. They also saw strong growth in online convenience shopping and funerals, which Allum believes will contribute to a stronger second half.
Despite economic uncertainty and price pressure, Co-op expects improved sales and profitability in the second half. Allum cited bigger baskets and more transactions as reasons for optimism, while acknowledging ongoing challenges.
The company’s leadership change in March, with Shirine Khoury-Haq stepping down as group chief executive, followed a reported loss in the year to January 3, after a cyber attack.
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Co-op introduced the Pop to Co-op campaign, emphasizing its convenience and top-up shopping strengths. The company anticipates stronger performance in the second half, driven by sales growth and profitability improvements. This optimism is supported by observations of larger baskets and increased transactions, despite ongoing market challenges.
