The Co-operative Group has reported its fastest food sales increase in seven years, boosted by its acquisition of the Nisa wholesale business, for the year ended 5 January 2019.
Like-for-like food sales rose by 4.4%, while the £137.5m Nisa purchase in May allowed the Co-op to supply Nisa’s 4,000 stores across the UK. They remain independent of the group but can switch to a Co-op franchise if they wish.
The group’s total revenues grew by 14% to £10.2bn, driven by the Nisa acquisition and the strong performance from Food. Capital expenditure was at £414m, £326m of which was attributed to store investment, refits and infrastructure.
Members of the co-operative received back nearly £60m through the 5% reward scheme, while a further £19m was distributed to 4,000 local community causes through the 1% reward scheme and funds from the sale of carrier bags.
“It’s important to understand that our Co-op’s commercial activity and its community and campaigning work go hand in hand,” said Allan Leighton, Co-op Group chair. “It’s beyond philanthropy and traditional social responsibility programmes. The support we give to local community causes or the campaigning we do on modern slavery and tackling loneliness are as important as running our food business or selling insurance cover. For us, doing the right thing makes good commercial sense.”
Leighton added that while in 2019 the organisation would be marking the 175th anniversary of the Rochdale Pioneers opening their first co-op shop – widely regarded as the start of the consumer co-operative movement in the UK – now is “not a moment for looking back”.
“We were in the wilderness for a long period of time,” he said. “My view, is that this co-op was not a co-op for 50 years – but it’s been one for the last three to five years. In my view the way you celebrate 175 years is by going back to what the co-op used to do, but executing it with modernity. All of our core values are still much in play, but we’re trying to make them in such a way that they’re very relevant to the society today.”
He added, “It’s pretty uncertain times to say the least, but we believe that co-operation can really be part of the solution. So we’re investing to further align our businesses with the needs of our members. We’re really trying to increase our understanding of what goes on to communities, and what is the best way to tackle those issues.”
Chief executive Steve Murrells said the plan for 2019 was to “continue to grow our business and reach more customers with our Co-op difference [by] opening more Co-op Food stores, through revitalising our Funeralcare business, through developing more Co-op Insurance products, and via our new Healthcare venture”.
He added, “Overall, we’re confident about the progress we’ve made in 2018 and the investment decisions we’ve taken. But there’s still much to do to achieve our Stronger Co-op, Stronger Communities ambition.
'In 2019 we want to further develop our community work through a deeper understanding of the needs and challenges faced by our members. Our plan is to create practical resources, founded on co-operative thinking, to help local communities thrive.”
On Brexit, Murrells said, “Like other businesses, we’ve been preparing as best we can for the possibility of a no deal departure from the European Union. Our commitment to British farming provides our members and customers, as well as our suppliers, with some welcome protection from any increase in tariffs.
'However, we still source many of our fresh food products from the EU and we are making contingency plans to the best of our ability. Our priority is to do our best for our members and customers through what could be a challenging time for the whole nation.'