Co-op to hand back £15.5m of Government support
08 April 2021
The Board of The Co-op has decided to repay £15.5m of the money it received in Government support during the Covid-19 pandemic. The money equates to the amount it claimed in furlough payments during 2020, which enabled the business to fully support its colleague workforce and keep 3,400 community-based food stores and funeral homes open.
Commenting on this decision, Allan Leighton, Co-op Group Chair, said:
“The Co-op has played a vital and unique role in feeding and caring for the nation through the Covid-19 pandemic and will continue to do so as the vaccine programme is further rolled out. We were grateful for the Government support that allowed us to manage our businesses through the pandemic, particularly our Funeralcare business, which has been working with bereaved families in extraordinarily difficult circumstances, helping them mark the passing of loved ones at a time of national grief.
“The pandemic turned our plans upside down and, while our revenues went up marginally, our costs rose dis-proportionately. We welcomed money from the Government on the basis that it was not a loan and we would not need to pay it back – and we took business decisions accordingly. I want to thank all of our Co-op colleagues who have made such a difference, day in, day out, over the past year and acknowledge the debt we all owe to them.”
Notes To Editors
The decision to repay Furlough monies but not to return Business Rates relief, took account of the following factors:
The Co-op took this Government support in good faith, not expecting to have to pay the money back and made forward-looking business decisions on that basis, including those designed to support all the communities in which it operates during the crisis, these included:-
- keeping more than 3,400 community-based of its own food stores and funeral homes open
- supplying food to more than 5,000 local independent food retailers through its Nisa wholesale business
- 1,000 Co-op Member Pioneers providing dedicated support for the vulnerable during lockdown
- As a community-based convenience retailer with a large store estate, the Co-op had a disproportionate increase in costs associated with remaining open, as compared to larger supermarket businesses
- As Britain’s biggest funerals business, the Co-op was operating in a market that was hugely impacted by Covid-19; there was a large increase in funeral numbers, but with restrictions in place, services provided were limited and costs rose significantly
- Despite Group Revenues rising £0.6m to £11.5 billion in 2020, the factors above contributed to a reported Profit Before Tax, excluding a change in accounting policy for funeral plans, of £92m, up £25m on 2019
- The Co-op does not pay dividends to institutional investors, does not have access to equity markets to raise funds and, given its corporate structure, faces higher financing costs than listed businesses
The Co-op: Russ Brady Tel: 07880 784442
Headland Consultancy: Susanna Voyle Tel: 07980 894557
About the Co-op:
The Co-op is one of the world’s largest consumer co-operatives with interests across food, funerals, insurance and legal services. Owned by over 4 million UK consumers, the Co-op operates 2,600 food stores, over 800 funeral homes and provides products to over 5,100 other stores, including those run by independent co-operative societies and through its wholesale business, Nisa Retail Limited.
Employing over 63,000 people, the Co-op has an annual turnover of £11.5 billion. As well as having clear financial and operational objectives, the Co-op 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.