The Co-op has returned to profit for the first time since 2015 after it recorded £72m profits before tax for the year to 6 January.
This is a significant reverse of the £132m loss in the previous year. Total sales remained flat at £9.5bn, although like-for-like sales in its food business were up 3.4%.
This was boosted by 4.3% like-for-like growth in its core convenience estate.
Total food sales were flat at £7.1bn, reflecting the impact of the company’s strategy to close larger stores.
Group CEO Steve Murrells said the disposals programme was now slowing down and that it had changed plans to offload some sites. “We are find that convenience works in stores up to 8,500 sq ft and even 10,000 sq ft, so some stores originally on the disposals list are now coming out of that list.
“Today’s results show how much progress we have made. All our businesses have performed well and we have increased profits and reduced debt, while continuing to invest for colleagues, members and customers,” said Murrells.
“The success we are enjoying shows that the Co-op’s difference really resonates today - a different ownership model and a different approach to business, based on returning profits to our members and their communities.
“We’re delighted with our performance, but we’re hungry for more and ready to create the Co-op of the future.”
Murrells was not able to give any further guidance of the CMA’s inquiry into its £127.5m takeover of Nisa, with the competition watchdog expected to say whether it will launch an extend phase two investigation toward the end of this month.
“We have put a compelling case to the CMA as to why this is good for food retailing as a whole,” he said. Referencing the CMA’s recent approval of the Tesco Booker deal he added: “Hopefully it will view it in the same way as it did a slightly larger retailer with a larger market share.”