Co-op swings back into the black despite shoplifting hit

The Co-operative Group returned to profit at the half year, the member-owned business confirmed on Wednesday, despite a surge in shoplifting.

The retailer, which also provides wholesale, funeral, legal and insurance services, said group revenues were £5.6bn in the 26 weeks to 6 July, compared to £5.5bn a year previously.

Underlying operating profits rose £4m to £47m, while pre-tax profits were £58m. Last year, Co-op reported a £33m loss.

Co-op said the return to profit had been driven by lower interest payments, reduced non-underlying charges and "strong" Funeralcare pre-planned investment returns.

Sales in food, its biggest division, rose 3.2%, with underlying earnings up 10% to £85m.

However, co-called leakage costs - comprising theft and fraud - in the division jumped 19% to £39.5m. Co-op said that in the six months to June, it recorded 950 crimes a day in its shops, a total of 172,008 incidents.

Shirine Khoury-Haq, chief executive, said: "We have delivered a strong performance for the first six months of this year as our strategy starts to gain real momentum.

"Although the external environment remains challenging, it is testament to the underlying strength of our Co-op that we have outperformed in all our markets while significantly increasingly investments in colleagues, pricing and the growth of our business."

She added that the chain remained on track to reach 8m members by 2030. Active members jumped 20% in the first half, to 5.5m.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "The extent to which shoplifting remains a scourge for the UK’s retail sector is evident in Co-op’s results.

"This is a savage bite out of its earnings, so it’s not surprising that the group has taken a leading role in campaigning on this issue. The amount…highlights the growing tide of criminality which retailers are having to deal with."