Co-op revenue hits £10.9bn; expects £275m virus hit

Manchester-based Co-op Group said on Friday its revenue grew 7% to £10.9 billion in the 52 weeks to January 4, 2020.

And the mutually-owned group said it expects its costs associated with Covid-19 to be up to £275 million.

Co-op Group is owned by its members and operates over 2,600 food stores, more than 1,000 funeral homes, and provides products to 5,100 other stores.

The Co-op employs 63,000 staff and also has businesses in insurance, legal services and health.

“It’s impossible to predict with any certainty what the full impact of Covid-19 on our business operations will be,” said Co-op CEO Steve Murrells in the group’s annual results.

“So far, we estimate that the impact on our costs is between £200 and £275 million, including significant increases in payroll, logistics, store expenses, investment in colleague safety and the impact of social distancing on the type and size of funerals we undertake.

“Some of this will be off-set by increased food sales and the changes to business rates announced by the Chancellor as part of the Government’s Covid-19 response.”

Group underlying profit before tax rose 50% to £50 million, driven by a strong performance in food.

Revenue in the Co-op food business rose 3% to £7.5 billion.

Murrells added: “The Co-op made further financial progress through 2019, showing that co-operation is working.

“While we didn’t know it at the time, that performance set us up well to withstand the impact of the COVID-19 crisis and to enable us to support the communities we operate in.

“No part of our business has been unaffected by the outbreak of the virus and we have played a critical role in communities throughout the UK.

“Our Food business has helped to feed the nation and our Funeral colleagues have been there for families at their time of greatest need.

“All of this work will continue and I could not be more proud of our people who have delivered – day in, day out. 

“Co-operation is something that is central not just to our business model, but to everything that we do and we are committed to continue to deliver against our vision of Co-operating for a Fairer World.

“Against the backdrop of COVID-19 we will review the strategy we had embedded across our businesses, aligning commercial and community objectives.

“Our responsibility as a co-op is to ensure that through our businesses, our wider influence is used to make the communities in which we operate feel stronger and more connected.

“That drives the business decisions we make — not profit alone and not shareholder value. The importance of that has never been so stark and we will continue to play our part for as long as we need to.”