Co-op to invest £70m lowering food prices and adds 430,000 new loyalty scheme members in six months
The Co-operative Group will invest millions of pounds lowering food prices after adding almost half a million new members.
The retailer said it had already invested £20million into slashing prices across its food stores and introducing member-exclusive pricing in the first half of the year, with plans for a further £70million investment.
It comes as other supermarkets move to slash prices as grocery inflation remains in double figures.
Loyalty rewards: Co-op has invested a further £70m into price cuts for members
Co-op’s plans for further cuts for its members comes amid backlash against Tesco and Sainsbury’s who have been accused of using ‘potentially dodgy tactics’ on some of their loyalty offers.
Co-op said it had seen a 55 per cent increase in member acquisition in the first half of the year, with 430,000 new members joining.
This compares to 278,000 new members joining in the first half of 2022, and is well ahead of expectations.
It also reactivated 143,000 lapsed members, meaning it enters the second half of the year with 4.58million active members.
Despite a ‘challenging’ backdrop, Co-op said it had delivered a ‘robust sales performance’.
Revenues dipped to £5.4billion in the first half of 2023, down from £5.6billion in the same period last year, which it said had been driven by lower revenue in its Food Retail business following the sale of its petrol forecourts to Asda.
Sales were up 4 per cent year-on-year excluding the revenue from these stores generated in the first half of 2022.
Underlying operating profit increased by £44million, while underlying losses before tax fell from £68million to £9million.
Shirine Khoury-Haq, chief executive, said: ‘While the economic environment remains challenging, we have again improved our underlying financial strength, significantly grown our membership base and delivered more for our members and their communities.
‘The business momentum established in the second half of the last financial year has carried through into the first six months of 2023 and has allowed us to significantly strengthen our membership offer and proposition – we have put our member-owners at the heart of what we do.
‘We have listened to what they need, and we have not hesitated in our response.’
Revenue in Co-op’s insurance division grew £3million to £14million, with challenges in the motor insurance market mitigated by a strong performance in travel insurance.
Funeral care revenue grew £8million to £146million, driven by a 7.2 per cent increase in volumes.