‘Co-operative-owned organisations are in vogue, and can play major role in recovery’ (From Bradford Telegraph and Argus)

‘Co-operative-owned organisations are in vogue, and can play major role in recovery’

6:43pm Thursday 18th March 2010 in

• Skip social links
• Print
• Email
• Comments(4)

Bradford-born retail chief Peter Marks has unveiled a massive rise in revenues and profits at the Co-operative Group, but warned that a return to ‘real’ economic growth could be a year away.

He described 2009 as a historic year for the Co-op, which bought the Somerfield supermarket chain and merged its financial services business with Britannia Building Society to create a ‘super mutual’.

Mr Marks also said that co-operative-owned organisations were in vogue and could play a crucial part in economic and social development in future.

The Co-op food retailing business is now the UK’s fifth-largest behind Bradford-based Morrisons, which bought around 30 of the former Somerfield stores from the Co-op as part of its expansion.

The Co-operative Group’s revenues jumped 31 per cent to £13.7 billion last year. Profits before payments to members – equivalent to pre-tax profits at a plc – jumped 85 per cent to £402 million over the year.

Mr Marks said the Co-operative’s food and financial services businesses would enjoy the benefits of greater scale in 2010.

The grocery arm, which has 3,000 stores covering every UK postal area except one and serves 21 million customers a week, grew like-for-like sales by 5.5 per cent and has seen 16 successive quarters of sales growth.

The Somerfield addition saw food revenues surge by £3 billion to £7.5 billion, while the mutual has seen a 12 per cent sales uplift from the stores in its estate which have been re-branded or modernised. Operating profits at the financial arm, which owns brands such as Smile bank, rose 21 per cent to £177 million as the group benefited from its merger with the Britannia.

The deal helped push up customer deposits to £32.5 billion during the year, although customers were also drawn to the more stable mutual model after the crisis which hit several mainstream shareholder-owned banks.

Other businesses in the group fared less well, with revenues sliding at its travel business and its motor dealership, including the former Sunwin Motors in Bradford and Keighley which was re-branded the Co-operative Motor group, posting a loss.

Peter Marks, who lives in Bingley, where the Co-op opened a store in the 5Rise shopping centre in September, said in spite of its 2009 success, the Co-op still faced choppy waters.

He said: “It may be that the UK does not start to see real economic growth until the end of 2010 or as late as the beginning of 2011. Therefore, sustaining the level of success we have enjoyed over the last two years will not be easy.”

He said the group was keen to encourage other forms of co-operative ownership and was supporting two Co-operative academies to help develop creative talent.