RISING costs resulting from Brexit and the lower value of sterling are the ‘single biggest problem’ for the Channel Islands Co-op this year, chief executive Colin Macleod has said.
Commenting on the society’s annual report for 2016, ahead of Tuesday's annual general meeting for members, Mr Macleod said that although food price increases in Co-op stores had been kept to a minimum at the end of last year, that could not continue indefinitely.
A 4% members’ dividend has once again been recommend and will be put to the vote during the meeting.
‘I am really pleased that we were able to protect consumers to the extent we were able to, but I think reluctantly that was a holding position, rather than a permanent one,’ said Mr Macleod.
‘At the back end of last year we were catapulted into some difficult discussions with suppliers who were trying to push some fairly heavy price increases our way, as a result of the currency fluctuation.
'I think it is true to say that we tried to shield our community from the results of Brexit and coming just before Christmas it seemed the right thing to do.
‘But our single biggest problem at the moment, our biggest challenge, is trying to rebalance the costs of this business while keeping pricing affordable for the community and maintaining the strength of the dividend,' he added.
The society’s report for the year to 8 January shows an increase in turnover, from £168.7m in 2015 to £172m, but a decrease in profit before tax, from £2,761,000 in 2015 to 597,000 last year.
Mr Macleod said the main reason for the decrease was a one-off £3m gain in 2015 following the revaluation of two properties. ‘Actually our underlying trade position is good, in fact better than any major multiple in the UK last year, particularly when you add in the value of the community dividend,’ he said.Subscribe to our Newsletter