Co-op recorded a pre-tax profit increase of £190 million last year, but the British retail group warned that a volatile economy is likely to impact this year’s results.

Food revenue was up by £134 million to £7.8 billion over the 12-month period, while wholesale earnings increased by £53 million to £1.4 billion.

Co-op said that while action taken early last year to strengthen its financial position leaves it in a "good position to address turbulent economic headwinds" including inflationary pressures, costs arising from this are expected to "dampen profitability" in the short-term.

“It’s clear that our early action to significantly reduce our debt, improve our cash position, and tighten cost controls, has made a significant difference to the financial strength of our Co-op and has enabled us to look forward with confidence, despite continuing market uncertainty,” said Shirine Khoury-Haq, chief executive, Co-op.

The retailer said that its next ambition is to attract one million new active members over the next five years, with an “improved membership proposition” planned in the first half of 2023.

“The inflationary challenges facing most consumer-facing businesses are well known, so for our Co-op to have delivered this level of performance over the year is encouraging," said Allan Leighton, chair, Co-op. “We are, rightly, judged by our members on both the financial and social value we can create and it’s clear that we’ve delivered on both sides of this equation."

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