Midcounties Co-op has announced an operating profit after significant items of £0.2m for the year to 27 January, down from £7.2m the previous year.
Excluding these one-off costs – including a £5.6m reduction in the fair value of properties and write-offs on the dispoal of non-strategic sites – operating profit more than doubled by £5.3m to £9.5m (2022/23: £4.2m).
Gross sales grew to £1,478m (previous year: £1,341m) and revenue rose to £837m (£803m), after positive growth in the food, travel and childcare businesses, buoyed by a growth in membership by 109,000 people and a 37% increase in member trade.
Group CEO Phil Ponsonby said this growth came despite the trading challenges of the cost-of-living, inflation and geopolitical instability. “We have done everything we can to avoid passing cost increases on to customers through cost control measures and improved efficiencies,” he added. “Reassuringly, we are now beginning to see a decline in the inflation rate, which we hope will ease pressures and contribute to a more stable trading environment for the year ahead.”
Food retail produced revenues of £602.4m, an increase over the previous year of £10.1m with like-for-like sales 7.1% higher.
The society opened five new stores while exiting from five stores that no longer matched its long-term plans, and has introduced efficiency measures such as electronic shelf edge labels and adding more self-checkouts.
Its Post Offices ended the financial year on a high note with commission income for the final quarter up by 7.9%, driven by improving footfall.
Travel revenue grew by £23.1m to £176.4m, and tour operation Co-operative Holidays continues to
expand. Midcounties invested extensively in its travel business over the year, with the launch of an agent management system and the construction of new website allowing online bookings, which went live in February 2024.
Related: Midcounties partners with Big Solar Co-op to fit panels at 29 sites
Childcare saw revenue of £43.2m, an increase of £1.4m over the previous year, with occupancy levels
increasing marginally. But with government increases in childcare support due to be phased in from April 2024 to September 2025, demand flattened as families waited for this assistance.
“Government changes to funding will also bring about both new opportunities and challenges for the group,” said Ponsonby.
The society’s utilities business – comprising phone and broadband, energy partnerships and flexible benefits services – saw revenue fall £0.7m to £9.4; £0.8m of this comes from the managed run-off of the government’s discontinued tax-free childcare voucher scheme.
Younity, its joint venture with Octopus Energy, now works with 250 community energy generators and plans relaunch the UK’s only 100% community-run renewable energy tariff this year.
“Wholesale energy prices have remained high, meaning it has been difficult to grow our Co-op Energy customer base,” said Ponsonby. “However, we continue to explore new ways to work with Octopus Energy.”
He added: “It is reassuring to see the colleague satisfaction score increasing this year and we continue to listen to colleagues through surveys and manager check-ins to make sure they are fully supported.
“With the rise in retail crime, we have seen over the last couple of years, improving protection for our colleagues has been of paramount importance. We have invested half a million pounds in preventative equipment, such as body cameras and security measures in our stores.
“Working with other retailers and our union Usdaw, we continue to engage proactively with our local police and crime commissioners and with the support of our trade associations and the Co-op Party, we have lobbied successfully for an amendment to the Criminal Justice Bill so that the assault or abuse of a shopworker will soon become a specific standalone offence.”
The society also continues sustainability efforts, replacing fridges at 50 stores and updating lighting to LED at 139 sites, investing £8m over the course of the last two years in energy-efficiency
projects. This has helped reduce energy use by 11% against the previous year, says the report, saving 5.2 million kWh of electricity.
“Looking to the rest of 2024,” said Ponsonby, “the upcoming general election adds an element of uncertainty to the landscape. However, we hope to see the rate of inflation normalise and the cost of living pressures ease, increasing customer confidence.”
