The Co-operative Group reported a slide in first-half profits on Thursday amid “very challenging markets”.
Pre-tax profit fell to £7m from £44m in the same period a year earlier, with revenues flat at £5.6bn
Co-op said that as far the food business is concerned, it continued to outperform competitors in the UK convenience sector and to invest in the segment, including the opening of a new regional distribution centre. Overall revenue nudged up 1% on the year to £3.91bn, while underlying operating profits fell to £41m from £68m in the first half of 2021, dented by inflation pressures.
In the funeral care segment, revenue fell to £319m from £142m, driven by declining mortality rates post-pandemic. Underlying operating profit dropped to £11m from £17m a year earlier, with the group pointing to rising energy costs and industry regulatory changes. Energy costs increased to £59m from £41m.
Chief executive Shirine Khoury-Haq said: “Against a highly challenging economic backdrop, we have made significant progress in strengthening our balance sheet, whilst continuing to support the needs of our colleagues, members, customers and the communities in which we operate.
“Looking ahead, while we are mindful of the continued economic challenges, we have great confidence in the underlying strength of the Co-op and all our businesses. Having faced into some tough decisions in the first half, focused on cutting costs and improving efficiency, we ended the period stronger both operationally and financially.”