64% rise in capital spend

Despite a tough year, Lincolnshire Co-op’s capital spend has risen by £10m, as strategic projects for long-term sustainability get underway.

The business opened two new food stores in Scartho, near Grimsby, and Coates, in Cambridgeshire, requiring a collective investment of around £4.5m.

A new £1.2m funeral home was developed in Horncastle, and in Lincoln, £890K was invested into Birchwood Health Hub, which has been designed to facilitate a more varied healthcare offering.

Over £4m was invested into renovating 31 outlets across food, funeral, pharmacy and post offices, and travel, and the co-op has improved efficiencies by upgrading its IT systems and implementing new technologies.

This work has been completed while navigating significant challenges, such as increased costs. These include National Living Wage and National Insurance contributions, which added £4.6m to personnel costs, alongside Plastic Packaging Tax and business rates.

As a member of the national Co-op Group buying group, the retailer also experienced supply issues caused by the Co-op Group cyber-attack, impacting food sales.

However, total turnover remains strong, at £372.8m. This was 0.7% lower than last year, however last year contained an extra trading week. On a like-for-like 52-week basis, turnover was up by 1.2% on last year.

The businesses’ underlying measure of profit, known as EBITDA, was reduced by 25% this year, to £15.6m. Regardless, Lincolnshire Co-op continues to pay members 1% cashback on purchases in its outlets and has given out £1.6m cashback throughout the year.

However, due to rising costs and strategic priorities, the business is not paying a cashback bonus to members this year. Last year, the cashback bonus was an average of an extra £4.71 per member.

Laura Dunne, Chief Purpose and Proposition Officer at Lincolnshire Co-op, said: “From member research, we know that our members most value cashback on purchases throughout the year.

“We have also been introducing new mechanisms to enable members to boost their cashback, which are proving popular, and we hope this will help to grow our membership too.

“However, we know that as a community retailer, our membership offering extends beyond member benefits; it also includes how we invest into services to meet the needs of our communities.

“In addition to paying cashback to members, we use our profits to invest in new services, to share with the community, and, as a large local employer, to fund a profit share scheme for our colleagues.

Lincolnshire Co-op’s membership base has grown by 4.9% this year, bringing the total number of members to 303,231, and the retailer reports higher levels of member engagement.

The co-op also employs around 2,900 local people, and all colleagues benefitted from at least a 77p pay rise on their hourly rate this year.

Local good causes have also benefitted from Lincolnshire Co-op's support, as £453,570 was donated to 263 groups and charities, including Macmillan Cancer Support, which received £242,752.

Lincolnshire Co-op also ran 12 green space projects, delivered 705 free health checks, introduced 10 new Wellbeing Walks and 13 new Community Cuppas, and supported 235 local breakfast clubs.

Alison Hands, Chief Executive Officer, said: “We are proud of our resilience as a business in overcoming challenges that have come our way, which would not be possible without the support of our colleagues, members and customers.

“Our capital spend has been focused on key projects outlined in our strategy, Purpose Beyond Profit 2030, and represents an investment in growth and long-term financial stability.

“This will enable us to deliver our purpose, which is to make life better in our communities, for many years to come.”