Co-operative looks to logistics investment

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The Co-operative’s investment in its logistics infrastructure showed its worth in the first half of 2013, as the food business faced up to difficult market conditions.

In April, the retailer opened a 480,000 sq ft distribution centre at Castlewood, north Derbyshire following a £22 million investment.

This was the final step in its long-term logistics investment plan, modernising its entire UK-wide logistics infrastructure to improve the service to stores.

While The Co-operative’s interim results were dominated by the problems in the banking business, the first half of the year saw the food business “deliver a solid performance against the backdrop of a difficult economy and continued fierce competition”.

Overall, food sales were down 0.4 per cent to £3.6bn. In the first quarter, like-for-like sales were down 2 per cent, driven by the cold weather in March. However, in the second quarter sales improved, falling just 0.3 per cent, buoyed by the June heatwave.

Investment in the business combined with reducing prices for customers meant that operating profit fell 1.3 per cent to £117.4m.

The group said it had launched five farming groups, aimed at cementing relationships with supplier producers, delivering a continued investment in quality and providing shoppers with a more consistent and transparent supply chain.

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