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Co-op store assistant

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CO-OP

Grocery chain the Co-op saw sales rise in the first half of the year as customers shopped closer to home and ate out less during the pandemic.

Like-for-like sales in food, which strip out the effect of new shops opening, increased by 8.8% in the six months to 24 July.

Its boss said: “We are living in unprecedented times, but the response of our Co-op has been exceptional.”

Co-op expects coronavirus-related costs to hit £97m for the full year.

Chief executive Steve Murrells told the BBC’s Today programme that the boost in sales was largely down to “people shopping more locally during the crisis”.

“We’re finding that when lockdowns happen… the average basket size doubles, but also local deliveries are very popular.”

Mr Murrells added that 1.7 million new households had shopped at a Co-op store for the first time during the pandemic.

Total revenues for the group increased by 7.6% to £5.8bn for the 26 weeks to 4 July, it said in its half-year results.

Coronavirus costs

Driven by an “exceptional performance” in food and wholesale trading, its profit before tax was also up 35% at £27m in comparison with the same period last year.

The group did, however, take a hit of £54m in coronavirus-related costs, it said. That was largely down to additional store workers being recruited and the purchase of personal protective equipment (PPE) for those working in shops.

The chain said it had recruited an extra 7,000 temporary workers to manage increased demand from customers.

Earlier in September, Co-op also announced that it would create an additional 1,000 jobs and open 50 new stores before the end of the year, having paused on opening any new sites during lockdown.

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Co-op

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The Co-op grocery chain aims to open 50 new stores by the end of 2020

On Thursday, it said that it had paid out a total of £13m in “Covid-19 ‘thank you'” bonuses to staff that had worked on the “front-line” of shops during the pandemic.

Co-op also confirmed that it had received £33m in government support in its first half, through furlough payments for a “limited number of colleagues” placed on leave, as well as business rates relief.

The group said on Thursday that it now expects competition to “intensify” in the grocery sector, but believes it remains “well-positioned”.

“The coming months and years remain uncertain, and we know our own Co-op will not be immune to the pressures the recession brings to family budgets and to local and national economies,” its chief executive said.