Britain's Co-operative Group reported a sharp drop in its interim profit on Thursday, as the supermarkets-to-funerals provider continued to face supply chain snags, and higher wage and energy costs, amid rising inflation.
"We know that the current testing conditions will not ease in the second half, and we will continue to face into the challenges," chair Allan Leighton said in statement.
Confidence levels among Britain's consumers sank to a record low this month as they battle higher costs of living, with the government's mini-budget sowing turmoil in the mortgage market and leading to warnings of a sharp drop in house prices.
Higher energy and wage inflation increased costs in the first half of the year for the company, despite attempts to cut costs in order to offset some external headwinds.
First-Half Highlights
The company also posted a slump of 84% in its first-half profit before tax to £7 million ($7.54 million).
Underlying EBITDA for the period amounted to £218 million, down from £248 million in the same period last year.
Elsewhere, Co-op Food revived its market share to 6.5%, according to data from Kantar, and was the fastest growing retailer during the summer, NielsenIQ data showed.
Chief executive of the Co-op, Shirine Khoury-Haq said, "Looking ahead, while we are mindful of the continued economic challenges, we have great confidence in the underlying strength of the Co-op and all our businesses.
"Having faced into some tough decisions in the first half, focused on cutting costs and improving efficiency, we ended the period stronger both operationally and financially."
News by Reuters, additional reporting by ESM – your source for the latest retail news. Click subscribe to sign up to ESM: European Supermarket Magazine.
