Like-for-like food sales at The Co-operative Group fell 1.1% in the first six months but the Group suffered a £559m loss overall a result of new write-downs in its troubled banking arm.
Operating profit in food dipped to £117.4m In the 26 weeks to 6 July 2013 compared to £119m last time in what the retailer termed a challenging market.
The Co-operative Group said sales trends across both the first and second quarters reflected unseasonal weather patterns. In the first quarter, like-for-likes were down 2%, driven by the cold weather in March 2013 but second quarter sales improved, falling just 0.3%, buoyed by the June heatwave.
A new strategy for the business – True North – was unveiled by the management team in early 2013. It aims to strengthen the Group’s focus on availability, value for money, convenience, customer service, product quality and community.
In the first six months, The Co-operative said it had reduced prices on nearly 1,000 products; launched five farming groups, aimed at cementing relationships with producers; and converted all its meat and poultry to 100% British supply.
The Co-operative said it had completed its long-term logistics investment plans, modernising its UK infrastructure to improve the service to its stores including £22m in its Castlewood Distribution Centre.
During the half, the retailer opened 10 new food stores and launched a new stock replenishment system to improve on-shelf availability of products for customers.
It also opened a Taste Centre, which is focused on food product development and quality monitoring. The Co-operative said the Centre will see over 1,000 products reviewed by a new colleague panel every year.