Essex based Co-operative; Chelmsford Star have announced its half yearly results and provided an update on the Society’s trading performance for the first 28 weeks of the year. CEO, Barry Wood said, “the year has had numerous challenges, with Brexit and a rising minimum wage contributing to a fragile trading environment”.
He explained that the Society had invested heavily in its core (food) business in-line with the strategic business plan, and as the economic environment is unlikely to get any easier, the Society needs to continue to deliver co-operation. The Society has recorded ‘year-on-year’ growth in sales of 7.4% and on a ‘like-for-like’ basis, excluding fuel, growth of 1.7% has been achieved across the estate. It had been enhanced with six stores undergoing a refurbishment within the period and a new store purchased in Woodford Green.
After a number of challenging years, the Food division has recorded a “like-for-like” increase in core categories of 4.6%, whilst service payments, i.e. bill payments and lottery sales have declined by 6.6% as consumers use alternative methods to purchase these services.
Barry reported that The Departmental Store business has seen a “year on year” decline of 4.3% in sales. Despite improved efficiencies and cost control, the business’s trading loss has increased to 2.5%, a level greater than last year and than that envisaged within the business plan. The Departmental Store business continues to review its operation and review trading partners and brands that may be attractive to our members and customers. New brands to join the store recently include Barbour, Brave Soul, Original Penguin, M&Co and Superdry. The
Travel business has again had a mixed performance; turnover has increased 11.8% “year-on-year”, with currency being the main driver of growth.
Due to the change in turnover mix, with lower margin products such as currency delivering growth, the trading profitability of the business has been ultimately affected, falling 11.3% below last year.
The Funeral business has faced growing competition over the past few years and this year is no different, with sales 14.7% below last year. Given the significant drop in sales, trading profit has reduced by 51.4% on that achieved last year, which falls well below the level envisaged within the business plan. Your Board has conducted a strategic review of the business, which will be implemented in the latter part of the year.
Membership activities were also addressed, many celebrating the Society’s 150th anniversary, as was their fundraising efforts. Thanks to the effort of customers, members and colleagues, over £34k was raised for Kids Inspire. The current charity of the year, Little Havens, have numerous fundraising activities in place and online donations can now be made via www.justgiving.com/chelmsfordstar
Barry reported that the challenge for the second half of the year will be to reverse the trend of the under-performing trading divisions, which if left unaddressed could undermine the Society’s result. A number of strategies are in the process of being implemented to address these areas, the efforts of which should be evident come year end. The Society continues to react, adapt and evolve to the challenges that we face.