Co-op same-store food sales fall
The Co-operative Group has reported a 48% rise in underlying profits, despite a 2.5% drop in same-store food sales.
The mutual said profits rose to £545.7m in 2010 and announced that dividend payments to its 6.5 million members would increase by 55% to £77.4m
Overall food sales were up 4.8% to £7.5bn as the group benefited from integrating the Somerfield supermarket chain, but like-for-like sales declined as it struggled to compete with supermarket rivals.
Its financial services arm, which includes Smile internet bank, reported a 24% rise in sales to £2.5bn following the acquisition of the Britannia building society.
The group warned the outlook would remain challenging into 2012 as the economic downturn is deeper than it expected.
The like-for-like decline in food sales across its supermarket chain had been partly caused by the disruption from its £1.6bn acquisition of Somerfield in 2009, said Marks.
At one stage the group was closing 25 stores a week to convert them to the Co-operative fascia, he added.
Talking about the Arctic weather conditions in December, which disrupted food sales, he said: “The snow often helps convenience stores, but this time it went on for weeks. Delivering to our 3,000 stores was very difficult because of their locations and, if I’m honest, we let down our customers.”