Operating profit dropped to £72m from £95m, while pre-tax profit was down to £17m from £36m.
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Chief executive Richard Pennycook insisted the group’s strategy, dubbed Rebuild, is on track.
The Co-op almost collapsed in 2013 after the discovery of a £1.5bn “black hole” in its banking operation. It also sold 70 larger stores earlier this year that were a hangover of its disastrous Somerfield deal to turnaround firm Hilco.
A month ago, the Co-op bank revealed a smaller first-half loss of £177m, down from £204m.
The Co-op has scrapped its famous dividend for the duration of the revamp, but is sending out new Co-op cards to customers to mark the launch of a new membership offer, “placing customers and communities firmly at the heart of the Co-op again”.
The mutual’s overall revenues increased 2.2% to £4.7bn in the 26 weeks to 2 July, with customer transactions up 3.3%. Debt increased to 0.7 billion pounds from 0.6 billion pounds. The Co-op said its convenient stores grew faster than the market following price reductions and improvements to products, with like-for-like sales up 4.3%.
Profits are thought to have suffered due to investments, pay rises for its front-line staff, pressure to keep up with the increasing price wars and a rebrand.
“We are able to invest for the long-term, strengthening the appeal of our products and services, because our business model allows us to pursue our unique approach, championing a better way of doing business for customers and communities”. The Co-op is Britain’s fifth biggest grocer with a market share of 6.6 percent.
Industry data published on Tuesday showed the Co-Op’s food business has continued to outperform the market with total sales growth of 3.1 percent year-on-year in the 12 weeks to September 11.
Pennycook said the Co-op was now 100 percent British on all its fresh meat supplies, insulating the group from exchange rate pressures.
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Co-Operative Group ltd (42TE.L) has lopped 45 million pounds off the valuation of its stake in Co-Op Bank, the company said on Friday, reflecting declining confidence in the lender’s fortunes amid broader problems in the bank sector.
