Southern Co-operative says increased food sales helped it to a pre-tax profit of £2.1m for the 53 weeks to 31 January, up from £1.2m the previous year.
The independent retailer’s annual report says the group operating profit was £2.8m (2019: £1.5m) and turnover was £490m (2019: £467m).
Chief executive Mark Smith said the results were slightly ahead on the previous year, “with the main driver being our increase in food sales growth”.
He added: “During the year, we received government support related
to Covid that was more than offset by significant additional business-wide costs from the multitude of Covid response measures we have taken, along with temporary closure losses.
“Our banking facilities remain unused, giving significant headroom to take up future investment opportunities. Our closed final salary pension scheme also remains in accounting surplus for the sixth year.
“Overall, I believe this is a credible financial performance for Southern Co-op in these exceptional conditions. It’s consistent with the trend for modest, but sustained, annual profit growth described in my report last year.”
Like-for-like food sales grew 7% in 2020, which the Mr Smith says reflects the spring panic buying as well as a longer-term sales growth that pre-dates Covid-19. “As such, 2020 is the third successive year in which we have grown LFL food sales by 3% or more,” he added.
The society’s funeral and crematoria operations saw increased activity during the pandemic, which also placed restrictions on client services. “Our teams worked incredibly hard to maintain high levels of service while supporting bereaved families,” said Mr Smith.
Southern’s Starbucks stores were forced to close for much of the first half
but have since traded well under the various restrictions put in place, and the society expects them to bounce back in profitability; 11 Starbucks franchises were added to the co-op’s estate.
The society has continued its investments, opening 17 new food stores – including 15 Welcome franchises.
“In our plans for further growth across both convenience store channels and in coffee, we’re aiming, subject to market conditions, for a similar total number of new stores in 2021,” said Mr Smith.
During the last quarter of 2020, Southern began piloting an online grocery shopping and delivery model in partnership with Snappy Shopper, which is running from stores in Portsmouth and Chichester.
Other investments include the rollout of of self-checkout units, which the co-op hopes to complete this year. It will also look to “optimise how and
where our central teams work, accommodating where possible, those who want to work differently” as pandemic restrictions lift.
Mr Smith said the society will prioritise three areas as it builds back from the pandemic – climate change, youth employment and tackling the growing problem of crime and abuse of store workers.
