Operating profits at Heart of England Co-op have risen to £5.5m for the year ending 20 January 2017, up from £1.7m the previous year.
But the society said 2017 had been “one of the most challenging and difficult years in recent times” with increased competition from discount supermarkets, and warned: “We face an extremely challenging and very uncertain 2018 and all the economic indicators are pointing towards a slowdown in the economy as it appears to be losing momentum amid Brexit concerns.”
It added: “Despite the challenges, we have had a very successful year.”
Group turnover for the year was £71.7m, up 2.4% on the previous year, and the society said it was implementing policies to “create a strong regional co-operative business which will withstand the economic challenges ahead.
“We are delighted to have continued to operate with no borrowings, indeed we are very well placed to continue with our re-development programme without having to rely on external funding.
“We have £19.7m in the bank and the society continues to invest in its renewal programme, with a further £2.1m utilised on new projects during 2017.”
During the year, the society disposed of “redundant non-food premises” at Rugby and Coventry and its distribution centre in Nuneaton.
Its food division recorded a like-for-like increase in sales of 6.75%, mainly coming from its convenience stores, but margins came under pressure due to “fierce competition in our trading region”.
Refurbishments included the rebuilding of the society’s Long Lawford food store, which has enjoyed sales increases of 70%, and extensoon of its Meriden store which is achieving sales increases of more than 40%.
“We also have plans to further expand our penetration in the food business and we are currently awaiting planning permission approval,” the report added.
“We have continued to review and improve our product ranges paying particular attention to our fresh food range which has seen a satisfactory level of increase in sales … We have also continued to support the Fairtrade product range.
“In October, we reluctantly closed our food store in Willenhall, Coventry and sub-divided the unit into two. Both the units have been rented out.”
The funeral division, which won the Leamington Spa Business Award for Customer Service, saw like-for-like sales grow 12.2% on a like-for-like basis, and masonry sales up by 17%.
“Our recently opened funeral homes in Nuneaton, Kenilworth and Kenpas Highway in Coventry continue to perform satisfactorily and the other satellite funeral homes also performed well, particularly our Asian funeral home in Coventry,” said the society.
“The low cost direct service offering has also been well received by the client families and the local communities we serve. We refurbished our funeral home on Lower Holyhead Road in Coventry to a very high standard which has been well received.”
The society raised in excess of £49,000 from the carrier bag levy, which has been donated to charities. Some of the levy topped up the £16,700 given to charity partner Guide Dogs through fundraising activities, bringing the total donation to £25,000. Over the two years, the Society has donated £50,000 to the Guide Dogs. Staff have voted for Zoe’s Place Baby Hospice as the nominated corporate charity for 2018.
Membership now stands at 137,000 following a review of the dormant accounts.
