By Kristy Dorsey
Supply chain difficulties and lorry shortages will hit annual profits at the Co-op, with the convenience store operator warning of higher prices for shoppers.
Reporting a 38 per cent dive in profits for the six months to July 3, Co-operative Group chief executive Steve Murrells said customers will be able to get everything they need for their weekly and Christmas shop. However, he added there “won’t be the same level of choice as there has been in the past”.
“Shelves in places aren’t as full as we would normally expect them to be,” he said. “With 90,000 to 100,000 drivers short [across all industries in the UK], there isn’t a quick solution.”
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The group – which operates 2,600 convenience stores along with funeral, insurance and legal services – posted a 3.4% slide in sales to £5.6 billion for the first half, with pre-tax profits down at £44m.
Along with others, the Co-Op’s grocery business has been forced to absorb rising commodity prices for items such as wheat, sugar and dairy products. This is being exacerbated by driver shortages, which are expected to hit the Co-op more in the second half of its financial year than in the first six months.
The Co-op said it is trying to make driving more attractive through improved conditions and pay. It is also offering training packages to young people to diversify the workforce.
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