(Reuters) - Britain's Co-operative Group reported a sharp drop in its interim profit on Thursday, as the supermarkets-to-funerals provider continued to face supply chain snags, and higher wage and energy costs, amid rising inflation.
The Manchester-headquartered company said the higher energy and wage inflation increased costs in the first half of the year for the company, despite attempts to cut costs to offset some external headwinds.
Co-op, founded over a 180 years ago, saw costs cuts help the company to not pass inflation related headwinds onto its customers, Chief Executive Shirine Khoury-Haq said.
Confidence levels among Britain's consumers sank to a record low this month as they battled higher costs of living, with the government's mini-budget sowing turmoil in the mortgage market and leading to warnings of a sharp drop in house prices.
"We know that the current testing conditions will not ease in the second half, and we will continue to face into the challenges" Chair Allan Leighton said in statement.
In August, the company sold its petrol forecourt estate, comprising 129 sites, to supermarket rival Asda for 600 million pounds, which it expects to help reduce its net debt significantly.
Net debt at the end of the first half of the year was at 731 million pounds compared to the 920 million pounds at 2021 year end.
Co-op operates over 2,500 food stores and over 800 funeral homes saw its revenue for the six months at 5.6 billion pounds ($6.1 billion) flat from a year ago.
The company also posted a slump of 84% in its first-half profit before tax to 7 million pounds.
($1 = 0.9194 pounds)