Lincolnshire Co-op half-year sales fall as food underperforms

Lincolnshire Co-op has reported a 1.2% drop in sales for the six months to 7 March, with weaker food performance offset by stronger results in funerals, pharmacy and property.

Earnings before interest, tax, depreciation and amortisation (EBITDA) declined compared with the previous period, although the society said it remains slightly ahead of its internal earnings target. Net assets held steady at £302.7m, providing a stable base for future investment.

The co-op said its main area of underperformance was food, reflecting pressure in the convenience market and wider economic conditions. At the same time, other parts of the business delivered stronger results, with pharmacy sales up 2.5% supported by service demand, including flu vaccinations, while the funeral division reported solid profit growth driven by cost control. Property remained a major contributor, accounting for 58% of total EBITDA.

Rising labour costs continue to weigh on margins, with most employees receiving an average pay increase of 3.79% this year. The business also pointed to broader uncertainty, including geopolitical disruption and its impact on travel-related activity, alongside ongoing pressure from a highly competitive convenience retail environment.

Additional challenges include continued losses in the post office arm and disruption at bakery business Gadsby’s following a wholesale partner entering administration. The society also referenced the impact of a cyber incident affecting the wider Co-op Group network.

Despite the softer trading performance, Lincolnshire Co-op continues to invest across its retail operations, including new shelf-edge technology, updated card payment systems and self-service tills. It has also upgraded IT and cyber security systems, opened a new store in Donington and completed upgrades across 10 existing locations as part of its longer-term “Purpose Beyond Profit Strategy 2030”.

The results highlight continued pressure on food retail within the convenience segment, even as diversified co-op models provide some resilience. For the wider UK supermarket sector, the performance shows how operators are relying on non-food income streams and ongoing investment to manage softer grocery demand and rising operating costs.

Editor’s note: Based on Lincolnshire Co-op interim member report and Co-op News coverage.