Co-op bucks slump with 6% food sales boost

Jan 7 2009 by Iain Laing, The Journal

THE Co-operative Group has bucked the high street spending slump by reporting a 6% surge in festive food store sales.

The chain’s intensive store refit programme, which saw 700 of its 2,500 estate revamped last year, helped drive the like-for-like surge in sales, excluding fuel, in the three weeks to January 3.

Manchester-based Co-op joined retailers including Next and Debenhams in reporting figures suggesting Christmas was not as bad as feared for the battered sector.

The UK’s largest mutual retailer said stores that were given a new look under its ambitious refurbishment plan recorded an average year-on-year total sales hike of 13%. The group spent £200m last year on the refits as part of an ambitious plan to transform the group and unify the brand following its creation from the merger of the Co-operative Group and United Co-operatives in 2007.

It will renovate another 700 stores this year and also wants to double profits under a three-year plan unveiled last April. The 6% Christmas trading sales growth represents a strong rise on the 3.4% seen in the previous festive period.

Co-op added that same store sales in the 13-week quarter to January 3 rose 5.2%, excluding fuel, bringing annual sales growth to 4.9%.

The strongest Christmas sales growth was seen in beers, sprits and wine, soft drinks, seasonal lines and across all areas of food, according to the Co-op. Top sellers for its online electricals business – which saw 20% sales growth in the two weeks before Christmas – included food processors, TVs and coffee makers.

Peter Marks, chief executive of The Co-op, said: “These results represent a good trading performance from our food business in an increasingly competitive market place and a difficult economic climate.”

Co-op is set for a further transformation this year when its Somerfield acquisition completes.

The move will add around 800 stores to its existing estate and propel the group into fifth place behind supermarket giants Tesco, Asda, Sainsbury’s and Morrisons with an 8% market share. The Co-op is already the world’s largest consumer co-operative and boasts 3.1 million active members.