UK retailer The Co-operative Group today (29 March) reported a fall in underlying food sales for 2011 but said the rate of decline had slowed throughout the year.
The UK’s fifth largest retailer booked a 2.1% year-on-year drop in food sales for the year to 31 December.
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However, the rate of decline dwindled as the year progressed. For the first half of the year, food sales dropped 3.6%, whereas third-quarter food sales were down 0.7% and fell 0.2% in the last three months of the year.
During 2011, the firm invested heavily in improving its food business. Over the past 12 months the group rolled out a replenishment system, opened two distribution centres, with two more in the pipeline. Its front-end operations saw 421 stores refitted, 32 new stores opened and the firm completed the acquisition of Scottish convenience retailer David Sands. The group also revealed it has invested in NPD and plans to roll out 350 new lines this year.
The investment, coupled with the difficult economic environment and pressure to maintain competitive price positioning, meant underlying operating profit from its food operations dropped 20% to GBP309.4m (US$491.3m).
Group pre-tax profits fell 5.8% to GBP373m during the period, on group sales down 1% at GBP13.3bn.
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