Co-op has reported a £44m increase in underlying operating profit, driven by its £101m cost saving efforts in 2022 and further savings in the first half of 2023.
The convenience retailer delivered a “robust” sales performance, having seen a £0.2bn decrease to £5.4bn for the 26 weeks to 1 July, which it said was driven by lower revenue in its food retail business as a result of its petrol forecourt sale.
EBITDA was up £27m to £226m for the period and net debt was reduced to £123m, down from £608m in the first half of 2022.
Co-op said that its “enhanced financial strength” allowed it to support members through the cost-of-living crisis with £90m invested in lowering prices of food products and into member exclusive pricing, as well as an investment of £34m in salary increases in the first half of the year.
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As a result, the retailer has seen 55% growth in member acquisition with almost half a million (430k) new members, up from 278k joining over the first half of 2022.
While Co-op expects “volatile external environment and turbulent economic headwinds” to continue, it is “more financially stable” and “more ready to invest and grow” as the board remains “confident” in the current strategy.
Co-op chief executive Shirine Khoury-Haq said: “I am very proud of our success over the last six months, particularly given the prevailing economic and market conditions. This performance wouldn’t have been possible had we not taken the decisions we did, as early as we did in 2022, when it came to better management of our members’ money and running the business more efficiently.
“The business momentum established in the second half of the last financial year has carried through into the first six months of 2023 and has allowed us to significantly strengthen our membership offer and proposition – we have put our member-owners at the heart of what we do. We have listened to what they need, and we have not hesitated in our response.”
