The Southern Co-operative has reported an increase in annual income and like-for-like sales in its annual results for 2017, but operating costs have also risen.
Total income for the 52 weeks ended 27 January 2018 was £431m, up 9% from the previous year, following investment in new stores and funeral homes.
Like-for-like sales grew by 1.63% and the society, which trades across 11 counties in the south of England, opened 16 new food stores in 2017, bringing the total to 216.
The co-op’s gross profit increased to £121m from £111m in the previous year, with members’ share of profits totalling £2.9m in 2017. They received around 2% back on all products sold in Southern Co-op stores.
Chief executive Mark Smith said: “We are pleased to have achieved another year of growth in our business. Profits this year are broadly level with 2016 on the earnings before interest, taxes, depreciation and amortisation measure at £17.1m compared to 2016’s £17.4m.
“That’s because the margin earned on the significant additional sales we achieved last year has been offset by cost increases beyond our control such as National Living Wage, business rates and the Apprenticeship Levy.”
He added: “We have built a strategic partnership with COOK, the highly regarded specialist frozen food business, following the introduction of items from its range into a number of our stores, and we will grow this further next year.
“2017 was also the first full year of operation for our community engagement strategy Love Your Neighbourhood, which gives local stores and funeral homes the chance to contribute to the creation of safer, greener, healthier and more inclusive neighbourhoods.”
Throughout the year the society contributed £1.26m to communities, up 24% on the previous year, as well as colleague fundraising and donations from members, suppliers and customers.
The funeral business acquired the East Devon Crematorium in 2017, extending its operations in the south-west of England, and launched online funeral plans. The funeral business’ total income reached £18.1m. The society plans to open a further four funeral homes in 2018.
Mr Smith added: “I’m pleased to say that our latest colleague opinion survey has shown a colleague engagement score of 84% and that remains amongst the best in the industry. However, we can never be complacent – so looking ahead we have plans to develop more initiatives to benefit colleagues such as a new wellbeing strategy and a significant two-year investment into upgrading colleague facilities in our retail stores.”
