Co-op braced for challenging year

The Co-operative Group today reported a 17% rise in half-year profits, but warned trading conditions would remain challenging until at least the end of next year.

It posted underlying profits before payments to members of £260m (€317m), up from £221m (€270m) a year earlier, with a 12.6% leap in profits at its supermarket arm.

Sales at the grocery chain dropped 1%, which it blamed on disruption amid the integration of the Somerfield business bought by the Co-op more than a year ago.

However, the group said like-for-like sales at the 2,500 stores refitted since the acquisition rose 2.5%.

Peter Marks, group chief executive of Co-op, said: “As anticipated, 2010 has been challenging so far, with tough economic conditions across all our businesses.

“Looking ahead, however, we do not expect things to improve until late 2011 at the earliest.”