Co-op swings back into profit and plans 120 new stores

The Co-operative Group swung back to profit in the first half of the year and aims to boost its fortunes still further by opening more than a hundred new stores.
The mutual reported pre-tax profits of £58 million for the six months to the end of June, reversing a loss of £33 million during the same period last year. It has a 6.1 per cent share of the UK grocery market and its wider interests include funerals, insurance and legal services.
The owner of Britain’s seventh-largest supermarket chain achieved first-half revenues of £5.6 billion, up by 1.5 per cent from the first half of 2023, largely thanks to its grocery stores and to its legal services division.
It also set out plans to open 120 new stores by the end of 2025 as it seeks to expand its grocery business, split between supermarkets that the group owns and its franchise model. “We are increasingly in a proactive mindset when it comes to the acquisition of new sites and acquisitions when it comes to our food business,” Matt Hood, the Co-op’s managing director of food operations, said.
The number of active member-owners at the Co-op rose by 20 per cent to 5.5 million, from 4.6 million during the same period last year. The Co-op said it remained on track to achieve its target of eight million active member-owners by the end of the decade.
“While we operate in sectors that continue to be challenging, we have outperformed the market in all of our three business units,” Shirine Khoury-Haq, 53, the chief executive, said.
Sales in the food retail division rose by 3.2 per cent in the period to £3.7 billion, avoiding a wider weakness in the convenience stores market. However, revenues from its business-to-business division, which includes its wholesale and franchise units, fell by 2.7 per cent to £1.7 billion.
The Co-op also reported strong growth in its life services division, which encompasses the funerals, legal and insurance operations. Revenues here rose by 7.3 per cent to £205 million in the first six months of the year.
The group reported a £39 million increase in its wage bill as it increased employee pay to match the 9.8 per cent rise in the national living wage in April 2024. The Co-op employs almost 60,000 people and is one of the world’s largest consumer co-operatives. It operates more than 2,300 food shops and over 800 funeral homes, while also providing products to more than 5,000 other stores, including those run by independent co-operative societies and through Nisa Retail, its wholesale business.
The company traces its origins back to the co-operative consumer societies started in 1844 by the Rochdale Pioneers. In 1863 the Co-operative Wholesale Society was formed, which eventually became The Co-operative Group.
A key area of growth for the Co-op is the “quick commerce” market for its food retail business. The Manchester-based group now holds a quarter of the market in the UK as it continues to expand.
“Growth of our quick commerce business is a huge underpin of where we are taking the food business,” Hood said. “We are the biggest player on all the platforms you will use — Uber, JustEat, Deliveroo, as well as our own — as customers continue to be time-poor and want to make sure they can use convenience to get what they want when they need it.”
Debbie White has had a rollercoaster ride after taking over at the head of The Co-operative Group at the beginning of the year.
During her first six months chairing the 180-year-old business, the member-owned company has reversed a £33 million pre-tax loss, but key issues such as the rising cost of shoplifting remain.
This year White, 62, said she had been attracted to the position because of the “purpose and values of this great northwest institution with possibility for growth”. She said her experience in running companies focused on business-to-business would be useful in the role as it was an “area where the Co-op has not historically been known for significant growth or change or transformation”.
White began her career as a chartered accountant at Arthur Andersen before joining AstraZeneca, the pharmaceuticals powerhouse. She went on to become the boss of Interserve, the outsourcing group, from September 2017 until the end of 2019. During her tenure the business went through a period of financial uncertainty that led to a pre-pack administration in March 2019.
She played a key role in setting up Britain’s network of Covid pandemic testing centres established by the government to tackle the detection and spread of the coronavirus.
White also has led the British division of Sodexo, the French contract caterer, and before being appointed at the Co-op had been the interim chief human resources officer at BT Group. She has sat on public company boards including Howden Joinery Group and Spire Healthcare.
When she took up the Co-op role at the beginning of the year, White became the second woman to chair the Co-op and, unusually for a big British business, she leads the group alongside Shirine Khoury-Haq, its chief executive.