Central Co-op has posted an operating profit of £19.8m (2022: £23.2m) for the 53 weeks to 28 January, as the cost-of-living crisis presented the retail sector with “challenging” 12 months.
The operating profit contained a number of one-off items, including restructuring provisions and a change in accounting estimate for funeral plan liabilities.
Performance came in on budget, added the co-op, and underlying turnover grew 9.1% to £953.9m (2022: £874.7m). Underlying trading profit fell 25.2% to £14.9m (2022: £19.9m), primarily driven by the removal of government support for business rates – which amounted to £4.5 last year, “with wider cost headwinds being broadly offset by significant mitigating actions to maintain our profitability”.
Net debt, which rose to £19.6m (2022: £2.9m) “as a result of planned increases in capital investment”, remains well within the society’s £40m debt facility, the report adds, while the society’s net assets hold steady at £272.1m (2022: £275.4m).
Writing in the society’s annual report, CEO Debbie Robinson said the year had been a difficult one, marked by ongoing international uncertainty over Ukraine and the economic crisis, and warned that “household disposable income is likely to continue to shrink during the first half 2023”.
She said Central would be emphasising “co-operative points of difference” in its strategy, delivering value to members.
Related: Central Co-op helps Ukrainian women rebuild their lives in the UK
“We have a clear plan and exciting opportunities to grow our sales, increase membership, improve our efficiency and mitigate increasing costs,” added Robinson. “Our focus has been on driving down our costs to provide better service and offer value to our members and customers, improve the terms and conditions for all our colleagues and mitigate the continuing fiscal headwinds.”
But there were some “difficult decisions” during the year, with changes to our central support structure a modernisation of the co-op’s Support Centre.
“Following collective consultation with [union] Usdaw, we successfully redeployed 33% of colleagues affected into alternative roles,” said Robinson. “I would like to thank all our colleagues for their support and professionalism throughout the difficult decisions.”
Investments during the year saw the society add nine stores and three cafes, and carry out 25 store refurbishments and one relocation. Food turnover rose to £691.3m (2022: £667.3m).
In the funeral division, underlying turnover excluding VAT and exceptionals was £60.6m (2022: £43.9m).
The society continued its Community Divided Fund, which shared out £180,719 between 162 charities and good causes.
Investment in solar energy at its stores and other efficiency measures helped the society reduce its carbon emissions from operations to 24.91 tonnes per £1m turnover (2022: 29.12)
“As we emerge from two extraordinary and transformational years,” said Robinson, “market trading conditions remain challenging and highly competitive. 2023 will remain a challenging year – the current cost-of-living crisis continues to drive historically low consumer confidence and reduced spending – we will continue the good work we are doing to safeguard and deliver a sustainable society.”
