Heart of England Co-op has reported a “satisfactory year of trading” in its annual results to 16 January, despite the turbulent backdrop of Brexit and Covid-19.
Turnover reached an all-time high of £92.1m, up 19.8% on the previous 12 months. Operating profits rose more than 22% to £3.3m, with a retained profit of £2.3m, up from £1.8m the previous year.
Food sales recorded an increase of 18.3%, reflecting the panic buying at the start of the pandemic, the switch to convenience stores as big supermarkets ran out of stock, and the increase in home dining under lockdown.
The society, which operates a network of 35 food stores and 15 funeral homes, says it invested £4.3m in new projects, alongside a huge outlay on PPE and other pandemic measures, with social distancing implemented to protect shoppers and colleagues.
In addition, the society launched a home delivery service through a new partnership with Snappy Shopper, giving customers the option to shop from home.
“Despite the fierce competition across the trading region the society still managed to increase its margins compared to last year,” the society added.
The retailer invested in major refurbishments in both Norman Place Road and Earlsdon in Coventry, which are both recording sales above budget. A further eight stores received mini refits and are each recording satisfactory sales increases. The Food Division is set to open a further two stores this year.
The Funeral Division also reported a sales increase of 3.8% and an 11.2% increase in the number of funerals on last year.
“The event of the pandemic meant colleagues in the Funeral Division were conducting greater volumes of services than ever,” said the society, “working tirelessly around the clock to ensure the quality of service to client families was maintained even if they were unable to receive the service they would have wanted for their loved ones.”
It added: “Due to the restrictions affecting funerals the average selling price fell and the Funeral Division’s overall contribution was down 3.2% like-for-like. But by regularly reviewing its internal systems and service offering to clients the society maintained its exemplary levels of customer satisfaction which stands at five stars among more than 1,000 customer reviews.”
Pre-paid plans fell by 36% – in line with the market trend – as the pandemic created uncertainty on personal finances.
Investments during the course of the year include a new funeral home in Southam and the extension and refurbishment of the funeral home in Daventry.
The society says it continues to invest in training its funeral staff to the highest standard and has recruited a professional development manager.
Other investments over the past year include three new ambulances.
Society membership now stands at 162,500 and the member’s rewards card, which offers a 2% discount on food purchases, has been well received with £381,000 of rewards earned by members over the year, more than double the £189,000 the previous year.
CEO Ali Kurji said: “Covid19 has had and is continuing to have a material impact on the society’s business operations and we are managing through the coronavirus pandemic in a measured and controlled way while recognising the opportunities to modernise the Society for the future.
“The society has a long and proud heritage. We are determined that the society will emerge from the current crisis as a stronger co-operative business that has positively demonstrated our point of difference across the communities in which we trade.”
