The Co-operative Group has ruled out launching an online grocery business, saying it will instead focus on driving food sales via its convenience network.

The society has ramped up its digital operations recently and last month recruited former government digital chief Mike Bracken to become its new chief digital officer.

But CEO Richard Pennycook told The Grocer there were no plans to launch into online grocery - a channel he said The Co-op’s competitors were so far struggling to run profitably. “We are investing very heavily in the convenience channel… that is our main target for growth.”

However, the group had “ambitious” digital plans, with Bracken set to “revolutionise how we communicate with our members through digital channels”, he added.

Pennycook’s comments came as The Co-op reported a turnaround largely due to improved food and convenience sales.

Despite revenues dipping to £4.6bn for the 26 weeks to 4 July from £4.7bn last year, pre-tax profits were £36m compared with a £9m loss in the first half of 2014, and underlying pre-tax profits were £64m compared with a £1m loss.

Thirty-five new c-stores opened during the period and a further 116 outlets were refurbished, delivering an average 6% sales uplift.

Pennycook warned the second half would see the impact of higher investment, with net debt starting to rise back up towards £900m and profitability falling. “Our key initiatives in the first half were our price investment in fresh produce, which is now the best value on the high street, and our previously announced pay award of 8.5% for 47,000 front line store colleagues.”

The group plans to open a further 60 new convenience outlets over the next 12 months.