Elaine Watson The Co-operative Group is considering letting out space in stores to strategic partners' which may not necessarily come from within the society's stable of businesses, revealed retail controller Malcolm Hepworth. A general store format suitable for the 60-70 grey area stores' in the no man's land between Market Town and Welcome will be tested this year, said Hepworth. "Some stores we will probably just downsize, but we are considering letting out space to someone else." More non food will also be brought into the food retail business as the society transfers distribution of these products from the non food department store distribution network to the grocery network. The society has set itself the target of 12 new-build stores this year and is constantly on the lookout for acquisitions. "We're frustrated we've not made more progress, but there is an enormous amount of competition for sites," said Hepworth. The society also plans to bring back a cash dividend paid from profits to reward members according to their level of custom with all of the group's businesses, said Hepworth. Staff are currently developing the technology to underpin the scheme, which is expected to start in 2004. Like-for-like sales at the Welcome convenience stores were up 6.4% in the year to January 12, and up 2.1% in the Market Town stores. Operating profits in the food division soared 76% to £45.6m on sales up 6.3% to £2.4bn driven by major improvements in supply chain efficiency and IT, and economies of scale. {{NEWS }}