OCTOBER 2018

NEWS
CO-OP GROUP
Co-op Group returns to pharmacy sector as half-year profits rise by £12m
The Co-op Group’s has reported pre-tax
profits of £26m (2017: £14m) in its interim
results for the six months to 7 July.
Revenues rose 10% from £4.5bn to
£5bn, underlying profit before tax was up
from £3m to £10m, and net debt fell from
£775m to £707m.
The Group said a strong sales
performance and the purchase of Nisa had
driven the figures. Food like-for-like sales
were up 4.4% and the Group, which noted
positive trading factors such as the World
Cup and the summer heatwave, has now
enjoyed 18 consecutive quarters of likefor-like
sales growth.
CEO Steve Murrells confirmed the
purchase of prescriptions app Dimec,
which allows the management of repeat
NHS prescriptions.
The deal marks a return to the
healthcare sector for the Group, which
sold its pharmacies in 2014 as it recovered
from its financial crisis. Mr Murrells said
it would allow the Group “to accelerate
the development of our healthcare
proposition, and provides the digital
platform to help customers conveniently
access and link their healthcare needs,
including interacting with their NHS GP”.
This emphasis on health and wellness
ties in to the Group’s Food business, with
healthy-eating and free-from ranges.
Mr Murrells told a press conference call
he hoped this would “nudge” people to
healthier lifestyles and reduce future
pressure on the NHS.
The Group said it had delivered £35m
of member value through the “5+1”
membership scheme, alongside price
offers on home insurance and funerals.
It added: “Our Co-op presence is
p The World Cup and summer heatwave helped boost sales
strengthened through the acquisition of
Nisa and the Co-op now supplies food to
over 7,700 stores. By the end of 2018 we
will supply 850 Co-op own-brand product
lines to our Nisa partners.
“Co-op continues to lead the way in the
Funeral sector via numerous measures
to tackle funeral affordability ... Our
Co-op social impact also increases with
over 12,000 local community projects
having now benefited from our member
reward scheme and over a dozen business
partners having joined our Bright Future
programme to tackle modern slavery.”
Asked about the Group’s contingency
plans for a no-deal Brexit, Mr Murrells
said the Group was “in good shape” to
meet the challenges of Brexit but “we
want certainty and no surprises”, adding
that he wanted assurances on migrant
labour to protect colleagues working at
the Group.
Jo Whitfield, chief executive of the Food
business, said the Group’s commitment
to British suppliers offered it some
protection, but called for “certainty” from
the government on its supply chains.
“It’s tough because people are working
in uncertain conditions,” she said, adding
that there was still not enough information
to draw up contingency plans.
Asked if there plans to store food, Mr
Murrells said the Group had the capacity
to stockpile longer shelf-life products but
warned that the real area of need would
be on fresh produce, affecting its imports
of fruit and other short-life products.
“Even if we were to quadruple our
chilled storage at docks for fresh food, it
would not be enough,” he said.
“We are nimble and agile enough to do
the right thing to protect availability, but
we are keen that the government hears
our concerns.”
Beefed up ethical policy sees an end to single-use plastic bags
The Co-op Group has announced an end
to single-use plastic, with the removal of
60 million plastic carrier bags in a phased
rollout of an environmentally friendly
alternative.
The move is part of a radical new ethical
strategy at the Group, which will also
tackle food waste, healthy eating, saving
energy and trading fairly. It sets out how
the retailer will ban single-use own-brand
plastic products and reduce its overall
use of plastic packaging within five years,
and cut out hard to recycle materials, like
black plastic.
Lightweight compostable carrier bags,
which can be used to carry shopping home
and re-used as waste bags, will be rolled
out to almost 1,400 Co-op food stores
across England, Scotland and Wales.
The Group’s pledge on plastic will see
all its own-brand packaging become easy
to recycle by 2023. It has promised to use
a minimum of 50% recycled plastic in
bottles, pots, trays and punnets by 2021.
6 | OCTOBER 2018