The Co-operative Group today revealed that its profits have halved as the latest financial performance was weighed down by restructuring costs, price promotions and an 8.5 per cent pay rise for frontline workers.
Pre-tax profits at the food-to-funerals mutual fell to £17 million in the first half of 2016 from £36 million in the same period last year. Sales edged up 2.2 per cent to £4.7 billion.
Like-for-like sales at the Co-op’s core food business rose rose 3.1 per cent – the sixth consecutive quarter of revenue growth. The insurance arm did well, with premiums ahead 29 per cent and profits leaping to £11m from £2m.
Profits at its funerals business fell £5m to £42m as the group said that a lower death rate was offset by increased pre-paid funerals.
The Co-op wrote down £45m on its remaining 20 per cent-plus stake in Co-op Bank, valuing the holding at £140m “consistent with falls in bank valuations generally”.
Chief executive Richard Pennycook hailed the progress that had been made but said “much needs to be done”.