THE Co-operative Group today reported a 48% rise in underlying profits despite a 2.5% drop in same-store food sales at its supermarket arm as it battled "extremely fierce" competition.
The mutual said profits rose to £545.7 million in 2010 and announced that dividend payments to its 6.5 million members would increase by 55% to £77.4 million.
Overall food sales were up 4.8% to £7.5 billion as the group benefited from integrating the Somerfield supermarket chain, but like-for-like sales declined as it struggled to compete with supermarket rivals.
Its financial services arm, which includes Smile internet bank, reported a 24% rise in sales to £2.5 billion following the acquisition of the Britannia building society.
The group warned the outlook would remain challenging into 2012 as the economic downturn is deeper than it expected.