CEO Peter Marks revealed food operating profits had plummeted 21% to £135.4m in the 26 weeks to 2 July on food sales down 4.6% to £3.7bn.
Admitting that he'd expect some of the c-stores to "be performing better than they are", Marks said food retailers were "fighting over declining food volumes" as shoppers cut their grocery bills and blamed "intense competition" from rivals for the sales slump. Shoppers now expected buy-one-get-two-free deals rather than bogofs and about 40% of products in its food business were on promotion. "This is unheard of. The norm is about 25%," he added.
But he reiterated that because of the nature of its business as a co-op, the society was "not chasing share prices and had a business model for the long term". "We are investing heavily," Marks said, "continuing the transformation we started four years ago. Today the business is unrecognisable."
The society invested £280m in its operations during the period, of which about two-thirds was spent on the food business. It opened two new RDCs and has two more in the pipeline, with a total investment of £110m.