Co-operative Group outperforms supermarket rivals

The Co-operative Group has reported a 17% rise in pre-tax profits to £228.8m in the 28 weeks to 25 July, boosted by an “exceptional performance” from its food business.

The Co-op

The retail group reported like for like sales for its food business up 7.3%, its 14th consecutive quarter of growth.

The results were buoyed by the group’s acquisition of supermarket Somerfield in February and are better than those reported by supermarket rivals Tesco and Sainsbury’s last week which posted like for like sales up 3.7% and 5.7% respectively.

Total revenue across the group’s businesses was up 27.1% to £6.4bn.

In a statement, the company says better shops, products, prices and customer service all contribute to the company’s success as well as the roll-out of the Co-op’s new branding and its television advertising campaign soundtracked by Bob Dylan’s Blowin’ in the Wind.

The group raised £650m through a disposal programme, which saw it jettison 200 stores following the Office of Fair Trading’s competition ruling on the acquisition of Somerfield.

During the period, the group converted 29 ex-Somerfield stores under the Co-op’s branding and 200 stores are to be converted by February 2010.

Sales of the Co-op’s Simply Value range, which it relaunched in March are up 80%.

Following the merger with Brittania in August, the Co-operative’s Financial Services saw shareholder profit up 11% while its pharmacy business saw operating profit up 8.7% to £14,8m and it’s funeral business reported operating profits up 16.7% to £28.1m.

Peter Marks, The Co-operative Group chief executive says: “After a period of extensive expansion and acquisition, the second half of 2009 will mark a period of consolidation. In spite of our recent success it would be naive to think that we are immune to the recession. That said we are pleased with our half-year performance, the second half has started well and we look ahead to the future with renewed confidence.”

Last week The Co-op revealed it was extending its agency review to include all creative marketing agencies.

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