The Midcounties Co-operative has increased sales by 7.9% for the year 2016/2017, according to its annual report.
The society reported sales of £1.35bn and a profit before significant items of £11.4m, in line with expectations but 26.45% lower than the previous year (£15.5m).
Chief executive Ben Reid said the society had continued to make good progress, with the food, funeral and travel businesses performing particularly well. But food inflation following the Brexit referendum result and Donald Trump’s unexpected US election victory had affected business performance.
Midcounties’ food business witnessed gross sales of £569m, up from £562m in 2015/2016. Sales of locally sourced products and the co-op’s Best of our Counties range also performed well with a year-on-year growth of 16%.
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The travel group doubled its profits on a 15% increase in sales, from £298m to £344m. The co-op completed refurbishment across travel branches in Finchfield, Codsall, Stourport and Worcester. More 5,000 people travelled on Midcounties-branded holidays and 20,000 purchased a room from the co-op. Sales to members have also grown 58% of all holiday sales following the introduction of a member’s travel club.
Midcounties’ energy business also grew significantly with the acquisition of 156,000 customers from GB Energy in November. The co-op ended 2016 with 424,000 customers and recorded gross sales of £295m, up from £253 in the previous year.
In terms of healthcare, the society witnessed a “difficult year” because of government funding reforms, with gross sales falling to £40m from £42m the previous year.
The society’s funeral business also performed well, with gross sales of £31m and increasing Funeral Plan sales by 51%. The childcare business generated sales of £30m for 2016/2017, a year-on-year improvement of 6.7%. With the introduction of the National Living Wage, 30% of childcare colleagues received a pay rise, reducing profitability.
Throughout the year, Midcounties’ membership continued to grow, recruiting 108, 771 new members. Membership trade also remained stable at 41%, comparable to the 42% in the previous year. The co-op managed to engage with more than 32,000 members at member events, its AGM and half-yearly meetings and launched a new membership app.
The society invested £29.8m on site acquisitions, branch refurbishments and IT infrastructure, and donated £390,000 to more than 500 good causes chosen by members across its 20 regional communities.
“Next year will also see additional costs to absorb such as increases in the National Living Wage, business rates and the introduction of the apprenticeship levy,” said Mr Reid. “This all adds up to a challenging year to come. But the decisions and actions taken this year means we are well-placed to meet these challenges and continue to progress our strategic objectives.”
