- Co-op reports profit decline due to record shoplifting levels
- Retail crime incidents surged by 44% in Co-op stores
- Co-op discloses £28 million pre-tax profit for 2023
The Co-op has reported a significant decline in annual profit for 2023, citing record levels of theft and competition from discount competitors.
According to the group, Co-op encountered 336,270 retail crime incidents involving theft and antisocial behaviour in its stores in 2023, an increase of 44% from the previous year.
The seventh largest supermarket conglomerate in the United Kingdom disclosed a pre-tax profit of £28 million for the fiscal year 2023, a decline from the £268 million earned in the previous year.
The revenue decline of £11.3 billion, or £200 million, is primarily attributable to the divestment of its petrol forecourt business in the latter half of 2022.
Revenue increased 4.7% when the impact of the refuelling forecourt sale was excluded.
During the period, food revenue decreased from £7.8 billion to £7.3 billion, while funeral care revenue increased by £6 million to £281 million.
The operating profit of the underlying group as a whole rose by £14 million, or 17%.
“This figure was even more impressive considering the prior year included earnings from the petrol forecourt business that was sold in 2022,” Co-op said.
Insurance revenue increased by £5 million to £29 million, whereas legal revenue increased by 47% annually to £68 million.
The supermarket conglomerate, which operates more than 2,400 food establishments, emailed its members to inform them that, as of January 2024, they would no longer be refunded 2p for every £1 spent. Patrons are granted until the end of 2024 to remit any funds onto their cards.
Established 180 years ago, the organization has over five million members and has encountered formidable competition from market leaders of Tesco and Sainsbury’s, discount retailers Aldi and Lidl, and discount retailer Aldi.
According to researcher Kantar, it had a 5.4% share of the grocery market at the end of 2023, a decrease of 20 basis points from the previous year.
Co-op said it had pledged to invest millions of pounds during the period to prevent price increases that would have negatively impacted profitability.
Its net debt decreased from £322 million to £82 million during the period.
To increase profitability and accelerate expansion, the chain has ambitious strategies.
The statement read, “To streamline our operations and our pursuit of growth, we are establishing three fundamental business sectors: Life Services, Business to Business, and Food Retail.” This will allow us to capitalize on opportunities in adjacent markets and better capture development in our current markets.
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The group’s chief executive, Shirine Khoury-Haq, further stated, “By steadfastly fortifying our financial standing, we were able to successfully manoeuvre through a significantly volatile external environment, thereby augmenting the value for our member-owners and enabling us to confidently strategize for the future while reestablishing membership as the central tenet of our enterprise.”
Our net debt has decreased by 90% over the past two years, from over £900 million to £82 million. Despite the persistent difficulties of the markets, we maintain a firm hold on our cooperative and our fate.
Additionally, she stated that this year would signify a “huge shift” for Co-op as it “begins laying the foundation for our strategic growth plans… with an emphasis on expanding our current businesses, such as our quick commerce market share and our presence in the life services industry.”
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