The Co-operative group has announced a fall in sales to £7.8bn (US$14.9bn) in year ended 8 January 2005, compared with £8.1bn the year before.
Pre-tax profits fell to £144.1m, from £385.4m the year before. The group’s food retail business had an operating profit of £74.5m, down form £122.3m.
“We said at the half year that 2004 would be a difficult year for the Co-operative Group, and today’s results confirm that,” said chief executive Martin Beaumont. “While a number of our businesses performed well, the results of food retail and CIS (the Co-operative Insurance Society) have not met expectations.”
“Both our food and insurance businesses found conditions challenging over the course of the year, although our difficulties stem as much from internal issues,” he said. “We have already begun a great deal of work to address these and are making good progress.”
Food Retail had a difficult year after five excellent years of expansion and success, with a fall in both profits and sales, the company said. As well as the fall in profit, on sales of £3.439bn, like for like sales were down by 1%.
“Turning around this performance will continue to be a primary focus of management efforts in 2005,” the company said. “Eoin McGettigan joined as head of the food business early this year, and is already contributing effectively to the recovery effort.”
“Given the significance of food retail to the group it is critical that we position ourselves as a sustainable food business capable of competing with and outperforming the very best in our chosen sectors,” it said. “We have a solid position in food retailing and the ability to get back on track in 2005. This will require a major management effort but our expectation is that the year ahead will see stabilised sales and recovering profits.”