29 September 2022

  • Decisive management action taken to reduce operational costs, improve operational performance and prioritise capital expenditure.
  • Reduced net debt position from year end through improved cashflow; sale of non-core petrol forecourt business (due in H2) set to reduce debt significantly further.
  • Continued vision commitments sees Co-op support its colleagues, members and communities in light of the cost-of-living crisis.

Financial & Business Development Highlights

  • In very challenging markets delivered a robust sales performance, with revenues broadly flat versus H1 2021. Co-op Food has revived its market share to 6.5% (Kantar) and was the fastest growing retailer during the hot weather (NielsenIQ).
  • A clear focus on cost reduction has helped offset some of the material external cost headwinds impacting the Group. Energy and wage inflation increased costs by around £50m versus H1 2021 before mitigating cost savings, and rates holidays in H1 2021 create a further £20m adverse variance.
  • In year cost saving targets of circa £100m are helping to partially mitigate these headwinds, rising to £150m in 2023 as these savings annualise.
  • Strong cash flow management has generated a significant improvement in cash generation, with £189m reduction in net debt versus £162m increase in net debt over same period last year.
  • The sale of our non-core petrol forecourt estate (completion due H2) will further reduce debt and allow headroom to reinvest in our core convenience business.
  • Financial Conduct Authority (FCA) approval met to achieve regulated status for funeral plan sales - the strength and heritage of our brand puts us in a strong position for future growth.

Financial Highlights H1 2022 in brief

  • Revenue: £5.6bn

    Flat compared with H1 2021 (£5.6bn)

  • Underlying operating profit: £18m

    Down £33m on H1 2021 (£51m)

  • Group profit before tax: £7m

    Down £37m on H1 2021 (£44m)

  • Underlying EBITDA: £218m

    Down £30m (H1 2021: £248m)

  • Net cash from operating activities: £315m

    Improves by £153m (H1 2021: £162m)

  • Reduction in net debt: £189m

    Compares to an increase in net debt of £162m H1 2021. A £351m favourable swing versus last year. Net debt down to £731m versus £920m last year end.

Cost of Living & Vision Commitments

  • Colleagues

    o Improvements to the pay of 41,000 front line colleagues of up to 5.3%, for all ages, including apprentices. This is in addition to :-
    - Paid breaks and up to 10% pension contributions as well as up to 31 days holiday.
    - A 20% food discount provided to colleagues.

  • Members and Customers

    o £37m price investment starting this month to lower price of 120 key products with costs to be held into the New Year.

    o Co-op members earned and redeemed £8.7m in personal rewards by shopping with Co-op.

    o £50 shopping bonus to members who purchase new or renew motor insurance policies.

    o Affordable digital Lasting Power of Attorney service launched by Co-op Legal Services.

  • Community

    o Over £14m pledged by 42 businesses towards Co-op Levy Share targets, supporting more than 1,000 apprenticeships.

    o Vital support for farmers with £19m in extra funding for UK pig farmers.

    o More than 4,500 local causes supported by Local Community Fund in H1, sharing £1.5m.

  • Sustainability and the environment

    o Co-op awarded prestigious Queen's Award for Enterprise for Sustainable Development.

    o Caboodle launched – a major not-for-profit platform to tackle food waste, connecting all Co-op’s store, other supermarkets, cafes and restaurants with community groups and volunteers.

    o Industry-first move to replace on-pack ‘use by’ guidance with ‘best before’ dates on own-brand yoghurts and ‘freeze me’ message to own brand milk.

    o Continued rollout of electric hearses, as the fleet moves away from fossil fuels.

Shirine Khoury-Haq, Chief Executive of the Co-op, said: “Against a highly challenging economic backdrop, we have made significant progress in strengthening our balance sheet, whilst continuing to support the needs of our colleagues, members, customers and the communities in which we operate. Our clear focus on developing our businesses, whilst controlling costs, improving our cash-position and reducing debt is paying dividends.

“Looking ahead, while we are mindful of the continued economic challenges, we have great confidence in the underlying strength of the Co-op and all our businesses. Having faced into some tough decisions in the first half, focused on cutting costs and improving efficiency, we ended the period stronger both operationally and financially.

"Since then, we have progressed further with the planned sale of our non-core petrol forecourts business. This will strengthen us more and provide the means to invest in our core businesses, whilst enabling us to support our members, customers, colleagues and communities through the cost-of-living crisis.

“I’d like to thank every single one of our colleagues for their leadership in delivering our results and vision this year.”

Allan Leighton, Chair of the Co-op, said: “The first six months of the year have been a time of challenge for us – as they have been for all businesses. I was delighted that we were able to confirm Shirine Khoury-Haq as our permanent CEO during this period. Her energy to move decisively on improving our financial position, focusing on core business development, whilst still delivering on our vision commitments, is helping us move forwards with pace and purpose.

“We know that the current testing conditions will not ease in the second half, and we will continue to face into the challenges, by remaining focused and by building upon our incredible co-operative heritage. I would like to thank all our colleagues for their hard work and dedication in these extraordinary times.”

Business Unit Performance & Highlights


  • Continued to outperform our competitors in the UK convenience sector and to invest in our business, including with the opening of a new regional distribution centre.
  • Co-op's grocery sales grew period-on-period throughout H1 2022 driven by an increase in the shopping frequency – 16 million shoppers use Co-op stores each week.
  • Overall revenue increased 1% year-on-year to £3.91bn while underlying operating profits of £41m were down versus H1 2021 (£68m) due to inflationary pressures which have increased the cost to deliver our proposition to customers and hit its highest level of 8.3% in June 2022 since 2009.
  • Improvements in food availability seen throughout Q2, returning to pre-pandemic levels.
  • Our Wholesale business generated a solid sales performance of £0.7 billion against challenging economic headwinds impacting all retailers. Underlying profit was up to £4 million recognising the shared benefits that can be passed through to Nisa customers with consistent availability and a strong product range and offer.


  • Growth in market share in H1 2022, but revenue fell by £3m (H1 2022: £139m, H1 2021 £142m), driven by falling mortality rates post-pandemic.
  • Rising energy costs and industry regulatory changes saw underlying operating profit decline by £6m (H1 2022: £11m, H1 2021: £17m)
  • Achieved regulated status as a funeral plan provider from the FCA.


  • Performed in line with forecast, with reduced revenue planned to bed in new Markerstudy distribution business model and ways of working (Insurance income H1 2022: £11m; H1 2021: £18m.)
  • Strong pet insurance sales following new product launch, including cover for rescue dogs and cats.
  • New van insurance product to deliver further choice and value to its members and customers.
  • New ‘equity release’ later life mortgage options to homeowners over the age of 55 launched in partnership with Legal & General.


  • Revenue up more than 10% at £22m, driven by continued growth of our market-leading probate business and an expansion of our digital capabilities.
  • Growing digital presence with half of all clients using online tools to seek support.
  • Over 100 new colleagues, including apprentices, recruited to handle increased case volumes.


  • Looking ahead, Co-op expects to face continued challenges during the year, given the persistent inflationary pressures, which is likely to prolong economic uncertainty amongst consumers and businesses alike.
  • We are, however, due to the management actions taken in H1 better equipped to weather the effects of these immediate pressures, whilst equally confident in our underlying business strength and longer-term prospects.
  • Post half year, Co-op has agreed the sales of its non-core petrol forecourt business for an enterprise value of £600m. Proceeds will be used to reinvest into core businesses, price for consumers and reduce net debt. Post completion of the deal, expected in Q4 2022, it is anticipated that debt will fall to approximately 1 x EBITDA.
  • The Board remains confident in the strategy, with a focus on driving growth through our established routes to market, maintaining financial discipline and continuing to deliver against our vision of co-operating for a fairer world.

Media Enquiries:


Russ Brady, 07880 784442, russ.brady@coop.co.uk

Cat Turner, 07834 090783, catherine.turner@coop.co.uk

Craig Noonan, 07702 505439, craig.noonan@coop.co.uk


Susanna Voyle, 07980 894557, svoyle@headlandconsultancy.com

About the Co-op:

Co-op is one of the world’s largest consumer co-operatives with interests across food, funerals, insurance and legal services. Owned by millions of UK consumers, the Co-op operates over 2,500 food stores, over 800 funeral homes and provides products to over 5,000 other stores, including those run by independent co-operative societies and through its wholesale business, Nisa Retail Limited.
Employing almost 60,000 people, the Co-op has an annual turnover of over £11billion and is a recognised leader for its social goals and community-led programmes. The Co-op exists to meet members’ needs and stand up for the things they believe in.

[Interim Results RNS in full]