Co-op returns to profit albeit cost of crime dents

Co-op Group's half-year pre-tax profit reached £58 million though soaring wage bill and rising cost of theft at retail stores dented the numbers, as shown by half-year financial results of the group released today (25).

Co-op spent £18m so far this year on measures to protect staff, including rolling out body-worn cameras and fortified kiosks.

Despite this, the grocery chain took a hit of £39.5m from theft and fraud in the first six months of 2024 – up 19 per cent on a year earlier – even as it increased campaigning on the problem.

Matt Hood, the managing director of food operations, said, “It isn’t going away. The reality is that every day four of our colleagues are attacked, up 34 per cent on 2022, and scarily, a further 115 of my colleagues will be seriously abused, up 37 per cent on two years ago.”

Hood however added that the investments are working as its "colleagues feel safer".

Overall, Co-op Group, which owns Britain's seventh-biggest supermarket chain, reported a profit in the first half as growth in membership and its quick commerce business offset cost inflation.

The group reported pre-tax profits of £58m for the first six months of 2024, against losses of £33m a year ago, and said its stronger balance sheet would allow it to expand with new stores and possible acquisitions.

"Although the external environment remains challenging, it is testament to the underlying strength of our Co-op that we have outperformed in all our markets," CEO Shirine Khoury-Haq said in a statement.

The 180-year-old group operates almost 2,400 food stores and also runs funeral, insurance, and legal services businesses. Revenue rose 1.5 per cent to 5.6 billion pounds in the first half, driven mainly by its food stores and legal services.

The group said it planned to open 120 new food stores across retail and franchise by the end of next year.

Co-op stated, "Food revenue up by 3.2 per cent at £3.7 billion (H1 2023: £3.6 billion), with strong sales across both food stores and online.

"Food underlying operating profit increased 10 per cent to £85 million (H1 2023: £77 million), inclusive of absorbing £39 million in colleague pay increases as part of our commitment to the Real Living Wage, and £55 million in pricing, with £34 million specific to members. Performance significantly ahead of the convenience market in H1, outperforming market level sales growth by 7.4 per cent points."

Co-op added, "Leakage costs (theft and fraud) up 19 per cent at £39.5 million (H1 2023: £33.3 million), with continued focus on campaigning on behalf of colleagues and members on retail crime."