East of England Co-op enjoys rise in both profits and turnover
A keen eye on costs and a local sourcing commitment has helped the region's largest independent retailer to a rise in turnover and profits.
The East of England Co-operative is celebrating an 'excellent' last financial year, despite the difficult economic climate and tough competition from major multiple chains.
It saw its turnover go up by �0.8m from the previous financial year to �353.3m, and reached its highest pre-tax profit in five years at �11.7m from �8.8m the year before.
East of England Co-op bosses put the positive results down to a focus on developing performance across the different business areas coupled with a keen eye on costs and a commitment to sourcing local produce.
The consumer co-operative has bucked the high street trend by opening new stores including food stores in Colchester and Norwich, refurbishing others, and expanding into new areas such as specialist wine merchants.
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Its considerable property portfolio has also risen value from �104.0m last year to �107.2m, and its 'Sourced Locally' food sales have soared 37% to �7.1m. It has about 500 properties but says it has strived to keep empty units to a minimum.
Behind the scenes it has been improving its energy management, and ranked among the top 2pc of businesses nationally in the first Carbon Reduction Commitment Performance League Table.
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Finance and technology executive Officer Doug Field said: 'These are excellent results for us and our members, despite a tough economic climate and vigorous competition. They reflect our focus on performance and profitability while being true to our commitment to trade fairly.
'Turnover is up, driven in the main by our food, funerals and optical operations. We've opened more stores and refurbished others. Our commercial and residential property portfolio is now valued at �107.2m and now generates more rental income due to our work to reduce the number of vacant properties.
'We've also kept a close eye on costs, especially relating to our energy management, and this has had a positive effect on the bottom line and on our environmental performance.'
He admitted the food business had become polarised, with stores like Waitrose and Lidl at the two ends of the spectrum doing well while other food retailers were being hit. He put down the East of England Co-op's success to investing locally, and a possible desire by consumers feeling the pinch to invest in businesses, like theirs, which were rooted in the local community. Recession-hit consumers were also tending towards more shopping trips more locally, and appeared to be less inclined towards a single 'big shop' for the week - perhaps as a result of harder times. This had also benefited the co-op business, which derives 70pc of its income from its grocery outlets which are based in local communities, he said. In response to the downturn, the chain's promotional activity has increased by around 30 to 40pc.
'We intend to build on these positive results and continue to grow our business, focusing on more store openings, investing in IT, making our property portfolio work harder for us and the communities in which we operate, and supporting our colleagues to deliver the best possible customer experience across all our businesses,' he said.
However, in the new financial year, which began for East of England Co-op after the fourth Saturday in January, Mr Field said he expects profits to reduce.
This will be partly due to some major investments, including a new store in Wickham Market opening in August and an ongoing refurbishment programme. He expects the company will spend around �10m to 20m this year on investment work, and said it hoped to be able to take on more staff. The business is also investing in its IT so that it can 'explore more fully' its online grocery options.
Executive officer on the retail side Roger Grosvenor said: 'We've seen a �7.9m increase in food sales, most of which is from sales of products from local suppliers. Chocolate, tea, eggs and beer are among hundreds of locally sourced products in our food stores in Norfolk, Suffolk and Essex.
'Since we started the 'Sourced Locally' initiative, we have spent more than �15m with some 114 suppliers, providing them with guaranteed-purchase contracts which enable them to trade profitably and, in many cases, to expand.
'An impressive 17.4pc increase in turnover in our optical business was largely due to the opening of a new outlet and we will continue to look at other opportunities in this sector.
'Our successful funeral business continues to provide an essential and caring service for our customers. We've seen a growth in demand for our pre-payment funeral plans and will continue to develop our services listening carefully to what our customers tell us they would like.'
The East of England Co-op has more than 200 trading outlets, ranging from food stores to petrol forecourts, employing more than 4,600 staff across Norfolk, Suffolk and Essex.