East of England Co-op has reported trading profits of £4.5m for the year to 25 January, down 19% from the previous year’s £5.6m.
The retailer cited market pressures on its food and funeral divisions and the cost of the increased living wage – but said sales at its continuing businesses had risen 1.8% to £6m.
Overall sales are down £5m because of the society’s exit from the pharmacy and optical markets together with the impact of the move of its distribution operation into the wider Co-op network.
Society president Sally Chicken said: “It is a challenging market, especially in our Food retail and Funeral operations. This has led to a fall in profits. This was anticipated, given last year’s tremendous result and the rising costs of doing business, especially the impact of the National Living Wage on our cost base.
“Decisions made in previous years saw us exit our Pharmacy, Optical and Distribution businesses.
“Pleasingly sales from our continuing businesses grew by 1.8%. We continue to invest in our business and have invested over £76m in the last five years to ensure we improve the daily lives of our members, customers, colleagues and communities.
“Our members also benefit from our success, enjoying a share of a £2.2m dividend last year, as well as a proposed dividend this year.”
Looking ahead, the report warned of the additional costs of the Covid-19 pandemic.
“It is impossible to predict the full financial impact of the Covid-19 situation on our 2020/21 results with any certainty,” it said. “We have a robust balance sheet and the resources we need to continue in operational existence for the foreseeable future.
“Our focus remains on improving the daily lives of members, customers, colleagues and communities. To do this, we will continue to invest in the business to ensure we have a vibrant future. This includes more Food store refurbishments and further investment in technology.”
