The Co-operative Food business has improved its supply chain processes and reduced stock levels, improving cash flow and enabling our stores to run more smoothly, the group said in its annual report.
While the troubles at the Co-op’s bank have been making the headlines, the retailer has been making progress in its retail food supply chain.
It said the improvements had been achieved through better ordering disciplines and improved relationships with suppliers.
“March 2013 saw the completion of the Logistics service network, which will help drive product availability through the supply chain and into stores, meaning customers will be able to get what they want when they want it.”
The group has shifted its focus to the convenience market. It has been selling larger stores and adding new convenience sites.
“In 2013 we opened 32 stores and a further 32 contracts were exchanged for stores that will open in 2014. A large number of these are situated in and around London, where we have traditionally been under-represented. Our London stores in particular have outperformed our initial expectations.”
Operating profit in the Food business was down from £269m in 2012 to £247m last year, while operating profit in the Pharmacy business was up from £28m to £33m. However, there was a goodwill impairment of £226m relating to the Somerfield purchase while the problems at the bank meant that overall the group produced a loss of £2.5bn.