The Co-operative Group said its food business delivered a “strong” result in 2010 despite a “difficult economic climate, extremely fierce trading conditions, and challenges presented as a result of the Somerfield integration”.
The UK-based grocer said today (30 March) that its food business saw operating profit before significant items increase by 33.3% to GBP382.6m (US$614.8m) in the year ended 1 January.
Sales were up 4.8% for the year to reach GBP7.5bn.
However, the convenience retailer said that like-for-like sales were down by 2.5% over the period, “reflecting the disruption to stores by the integration of Somerfield”.
The group said that it will have completed the rebranding of the Somerfield stores it acquired by April 2011. The company said it has taken “great strides” to get its customer offer right, particularly in the larger stores, “ensuring we have the range on offer that our customers expect”, adding that it is an “ongoing project” that will see “further improvements in 2011”.
“Looking ahead, we had hoped to see signs of economic recovery by the start of 2011, but the downturn is clearly biting deeper than we had expected. We now anticipate challenging trading conditions through to the end of this year and into 2012. With consumers feeling the squeeze on their spending, I know that all of our businesses will have to fight for their market share,” said group CEO Peter Marks.
However, Marks remained confident that the retailer is well place to meet the challenge, despite still being in transition. “During 2011 we will still be a business in transition, however, all the work done over the past three years means we are in good shape to continue to weather the downturn and make the most of opportunities when the economic situation improves.”