Southern Co-op has issued its annual results for the 52 weeks to 28 January, with a trading profit of £75,000 – up from a loss of £4.7m the previous year.
However, the society recorded an operating loss of £752,000 – a reduction on the previous £1.3m loss. Turnover grew to £546m, from £515m.
In the report, CEO Mark Smith said the year had seen the continued impact of inflation, adding: “Disposable incomes in total have grown in real terms most recently, but many household budgets remain extremely challenged. Looking ahead this is likely to continue to adversely impact consumer spending generally.”
The society also saw cost pressures from an increased living wage and higher business rates, said Smith, adding: “We are working hard to manage these impacts, but they inevitably effect profitability and the returns achieved on our investment in assets such as new stores.”
He said the society will continue to invest in growth, with “a clear plan to improve profitability over the next two years”, including measures to control the cost of retail crime.
“We are seeing the benefit of our investment in business growth in recent years,” he added, “with both our Starbucks and Welcome store estates now having grown to over 70 stores each. We have plans
in place to grow both chains further in the next two years.”
He said the Welcome estate now generates more than £100m a year of retail sales, while Southern’s own convenience food business has “focused on consolidation of earlier investments, and successfully updated store resourcing models”. 2023 also saw the completion
The society has also completed work to upgrade its IY system, with a new AI-enhanced package going live from March 2024.
Climate targets are also on track, said Smith, with a further improved emissions target to be announced
later in the year.
Looking ahead, Smith said “positive cash generation, with our very modest level of debt, means we are well placed to deliver future growth through our capital investment programme”. The society’s strategic plan period to 2026 will focus on growing convenience volumes, hitting a target of 100 Starbucks stores by the end of 2025, and driving market share in natural burial, cremation and pre-paid funeral plans.”
