The Co-operative will bounce back, says the new boss
The Co-operative is ready to repair its shattered reputation, the new chief executive of the beleaguered group has said.
Richard Pennycook, who is on a basic salary of £1.3m, accepted his new job after the mutual's members voted in favour of radical reforms at the weekend.
Mr Pennycock, the former finance director who has been standing in for ex-boss Euan Sutherland since he resigned in March, described the changes to the business as hugely important.
He added: "We have taken major steps over the last six months, securing governance reform and repairing our balance sheet, but we have much to do."
The group reported a record £2.5bn loss for 2013 as it was dragged down by the near-collapse of its banking arm, but it has since claimed an improvement.
It now owns just 20% of the bank, following a rescue that saw hedge funds and other groups take control of the lender.
For the six months to July 5, the group saw comprehensive income of £116m, compared to a £1bn loss for the same period last year.
The figures included profits from its farms and pharmacies, now sold, plus gains from pensions reclassifications and last year's major losses. Stripping these out, there was a £9m pre-tax loss for the first half of the year. Revenues fell from £5.3bn to £5.1bn.
Supermarkets saw a 1% rise in like-for-like sales, including a 4% boost from the Co-op's network of smaller convenience stores, but overall revenues and operating profits fell.
The group is expanding its convenience store network and plans to open 100 new stores by the end of the year. But along with larger rivals it is facing a price war sparked by Aldi and Lidl.
Mr Pennycook said: "The overall grocery market has its challenges at the moment, but we think that our strategy is the right one and it is bearing fruit."
Elsewhere, the group was hit by a fall in national death rates as funerals fell 6% to 48,000. Online services are now being introduced and a national advertising campaign will begin in September.
Insurance posted a £7m operating loss for the period after increased claims following bad weather conditions early in 2014, and amid tough competition.