Co-op profits up despite Somerfield integration disruption
Co-operative Group has posted a surge in first half profits but like-for-likes at its food arm fell because of disruption caused by the integration of Somerfield.
Co-op’s food division reported sales up 11.5% to £3.9bn and underlying trading profit up 12.6% to £169.7m.
The retailer reported that like-for-likes in shops predating the Somerfield acquisition rose 4.1% in the 26 weeks to July 3 and rebranded shops, including those converted from Somerfield, delivered a 2.5% advance. Across the entire estate like-for-likes fell 1%.
The retailer was relaxed about the performance and maintained it was caused by the “unavoidable disruption” associated with large-scale integration.
Co-operative Group reported: “We are reaping considerable benefits from our new-found scale – 7.6% market share – with better buying terms being reflected in keener prices.
“When we acquired Somerfield we said that to be successful the integration needed to be done at pace – ‘one business within two years. That is still our plan and we are on track to deliver it by quarter one 2011.”
At group level, the food-to-funerals giant made an underlying profit before payments to and on behalf of members – the equivalent of a conventional company’s pre-tax profit – of £260m, up 17%. Turnover rose 8% to £6.9bn.
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