Co-op repays furlough support after pandemic sales boost

Date : 08 April 2021

Nicola Knight

Senior Analyst - Food-To -Go

The Co-op has announced its full year results for the 51 weeks to 2 January 2021, along with an announcement on its decision to repay relief it received through the UK government’s furlough scheme.


  • Group revenue £11.5bn (2019: £10.9bn), +5.5% vs 2019
  • £84m of additional Covid costs during the year (£82m supported by Government economic measures), below the £97m forecast in June
  • Significant increase in Co-op Community & Campaigning Support including £27m given to charities and community causes, 5m meals delivered through FareShare, £3.1m donated in vouchers and technology equipment to schools
  • Repayment of £15.5m received in Government support during the Covid-19 pandemic

Food and Wholesale: growth slowed in H2

  • Food – sales £7.8 billion, +3.5% vs 2019, like-for-like sales +6.9%
  • Wholesale - sales £1.6 billion vs £1.4 billion in 2019; 624 new independent stores signed up by Nisa

In their interim results last June, described by Co-op as “exceptional”,  H1 revenue increased by 7.6% vs 2019 driven by food and wholesale.  Food division H1 sales rose 5.2% with like-for-likes up 8.8% - ahead of IGD’s convenience channel growth forecast at +7.3% for 2020.  Co-op’s market share peaked at 7.4% in June according to Kantar

The full year results show a very different second half.  By the end of the year, food sales growth had slipped to 3.5% vs 2019 with like-for-likes up 6.9%.  Kantar’s Co-op market share at the end of 2020 was the same as at the end of 2019.

Lower convenience channel usage could be a factor

Whilst store closures would account for the slowdown in overall food sales growth, our ShopperVista multichannel usage data may shed some light on why the fall in H2 like-for-likes occurred.  

The chart below shows that in the second half of 2020 visits to convenience stores did not recover to pre-COVID levels as well as larger stores.  At the same time, online usage continued to grow and food discount usage made continued recovery.

Source: IGD ShopperVista

Relaxation of travel restrictions, increased staycations and good weather are likely to have contributed to some bounce-back in convenience store visits in August, but this did not last into the autumn.

With an older shopper profile, Co-op may also be impacted by the switch of many older shoppers from convenience to online. In December’20 74% of 65+ used convenience stores that month, down from 85% in Jan’20.  In contrast, 48% of those aged 65+ used online grocery in December’20 compared to just 27% at the start of the year.

How other Co-op businesses performed

  • Funeralcare: revenue flat year-on-year (funerals +11.4% but restrictions meant only basic arrangements possible)
  • Insurance and legal: sales much reduced early in pandemic, particularly for motor and travel insurance policies, as lockdown restrictions impacted trading across the sector
  • Co-op Power (B2B clean energy buying group): launched November 2020, recent corporate clients include Nationwide Building Society, Roadchef and the RNLI
  • Health: grew to sixth largest dispensary business in 2020 but capital investment requirements prompted sale announced in March 2021


Co-op acknowledges that significant uncertainty remains and against the backdrop of a what it describes as “a worsening consumer economy” it must continue to exercise financial prudence. 

Whilst it continues to rebuild the balance sheet to secure the long-term future of the group, it is working to respond to the changing needs of customers, reflected in hyper-localism, further moves towards digitisation in all businesses and providing value for money.

Its approach and purpose remain the same: championing a better way of doing business for customers and members and their communities by offering a range of products and services which create value in its broadest sense.

Steve Murrells, Chief Executive of the Co-op, said:

During the last few years, we’ve created a business that is truly focused on delivering clear value and benefits for our members, customers and their communities. All that work proved to be essential in giving us the ability to respond to the immediate and sustained demands which the pandemic brought with it. Our Vision, Co-operating for a Fairer World, was our guiding light throughout, and our response to Covid-19 demonstrated the power of co-operative enterprise and the relevance of co-operative values.”

Our view

The exceptional results Co-op achieved during the early months of the pandemic, when shoppers used convenience stores for more of their main shops and increased basket sizes, look even harder to match in light of the slow-down in growth in the second half of 2020.

During this year’s lockdown, online channel usage has remained significantly elevated (unsurprisingly), supermarket channel usage has been stable yet convenience channel usage has continued to slide (ShopperVista subscribers can read more here).  As restrictions lift, shoppers are likely to return again to the discounters following the trends we saw last year, but will the same be true of convenience?  Another hot summer and more staycations would certainly help Co-op and other convenience store retailers regain usage and continue to grow year-on-year.

This year we’re seeing polarisation in shoppers looking for quality vs value, with higher income groups focusing more on quality and lower income groups focusing more on saving money.  Co-op has been focussing on changing price perceptions for some time now, most recently with the launch of its Honest Value own brand range.  Getting the right balance in being seen to offer good value as well has quality products will continue to be a challenge for Co-op in 2021.

Co-op Trade Briefing 2021

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