The Co-op’s profits and membership numbers jumped in 2024, though the grocer has warned of growing cost challenges in the year ahead.

For the full-year to 4 January 2025, the convenience retailer’s profit before tax soared by £133m to £161m, up from £28m in the previous year. It said this increase was driven by rising operating profits and improved Funeralcare plan investment returns.

In its food business, underlying operating profit increased by £28m to £201m, as member penetration in its food stores rose by 38%.

Total sales were maintained at £11.3bn and in food, overall sales were up 1.9% at £7.4bn. Online sales jumped 46% to £460m.

During the year, Co-op’s investment in its food stores saw it triple the number of new-own brand products launched. It put £88m into lowering food prices for members, with a further £82m invested in its estate and £35m in technology innovation.

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As a result, the retailer’s membership base grew by 22%, reaching 6.2 million members. There a 66% increase in new members aged 25 or under.

Co-op CEO Shirine Koury-Haq said: “Our solid business performance alongside the progress we have made in right sizing the business and delivering against our new strategy, is enabling us to create more value for our member-owners every day.

“While broader economic challenges remain, our businesses are delivering strongly against the market and I’m proud that we continue to provide support to our colleagues, members, and their communities through the continued cost of living challenges they face.”

Looking ahead, the group continues to expect wider external pressures and volatility, with broader geopolitical issues, as a result the introduction of both extended producer responsibility (EPR) charges and higher National Insurance contributions, and cost inflation.

Co-op said that while it is “not immune from these pressures”, its focus will be on medium to long term profitability.

The grocer is also on track to grow its membership to 8 million by 2030 and is on track to open over 120 new stores across retail and franchise by the end of 2025.

Khoury-Haq added: “We look to the future with confidence, supported by a strong balance sheet and a clear and compelling business strategy with a focus on growing our Co-op for the future.”