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BREAKING NEWS

Co-Operative Group posts lower profit, flags Brexit risks

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(Reuters) – Britain’s Co-Operative Group <42TE.L>, the mutually-owned supermarkets-to-funerals group, reported a lower first-half profit on Thursday, as weakness in its funeral unit offset a strong performance in its food business.

Co-op, the country’s sixth largest supermarket operator, said pretax profit fell to 25 million pounds in the 26 weeks to July 6 from 44 million pounds in the same period last year.

The company said it had “sensitised” its forecasts to include pessimistic views on risks such as a hit from Brexit.

Group sales rose 12% to 5.4 billion pounds, driven by a strong performance in its food business and the purchase of the Nisa convenience chain.

Food sales rose 3% to 3.7 billion pounds, with the country’s fifth biggest food retailer recording 22 straight quarters of like-for-like sales growth in the unit.

Co-op, which has been recovering since 2013 from a crisis in its then banking unit, said it was planning to address the risks to its supply chain brought on by a “no deal” Brexit.

A British demand for supermarkets to prepare for a potentially chaotic no-deal Brexit by stockpiling food is stoking anger in the industry, with bosses saying they should not be blamed if people can’t find everything they want on the shelves.

The country’s biggest mutually-owned business also reported a 6% drop in revenue from its funeral business as it conducted fewer funerals and did not raise prices in a competitive market.

Britain is set to crack down on high pressure and misleading tactics in the sale of funeral plans, City Minister John Glen said in June.

(Reporting by Noor Zainab Hussain in Bengaluru; editing by Arun Koyyur)

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