The Co-op braces for £275m Covid-19 bill as it battles to secure PPE

The Co-op today said put the cost of the Covid-19 crisis at up to £275 million and said supply of PPE to its stores was “hand to mouth”.

The food retailer, which has seen stores swamped since the onset of the crisis, has put protective screens in its 2500 stores and attempting to source masks and gloves.

Group chief Steve Murrells said: “In the first weeks we could not get everything in as quickly as we wanted it. It’s been hand to mouth. You are very reliant on the next shipment coming in an time. The first draw down goes to the NHS of course but we would want to ensure that we continue to have enough PPE for stores.

Food chief executive Jo Whitfield added that the chain had built in extra time for staff to repeatedly wash their hands.

The group reported a 7% rise in revenues to £10.9 billion in the 52 weeks to January 4, aided by a sixth consecutive year of rising food sales for the mutual which nearly imploded amid the Crystal Methodist scandal in 2013. Underlying profit rose 50% to £50 million.

The company put the cost of extra staff, logistics and social distancing measures at £200 million to £275 million. The figure outstrips the £50 million to £60 million the business is estimated to gain from a tax break from a year-long business rates holiday.

Food retailers had been criticised for receiving the break, available to all retailers, when their shops have been booming. “We are going to need that help,” said Murrells.

Co-op was among the winners as a wave of stockpiling at the start of the crisis saw shoppers flood food stores and clear shelves. Local convenience stores have done particularly well as consumers increasingly stay close to their homes amid the lockdown.

Co-op has also been forced to adapt its funerals business. Just 10 people can now attend its services, which can be live streamed.

The group also admitted that it had found accounting errors worth £33 million on the books of convenience store chain Nisa, acquired for £143 million in 2018. Murrells sad the “anomalies have been put right” and stood by the deal, which allows the Co-op brand to be wholesaled through Nisa stores.