Co-op cashes in on ethical trend

By Malcolm Craig

- Published: 29 September, 2006

The trend towards ethical shopping has had a bonus effect on the Co-operative Group, which announced pre-tax profits up 32% to £157.4m in the first half of the current year.

Strongest sales stemmed from the food retail division, which City analysts reckon is the more profitable part of the Co-op business. Underlying sales at the Co-operative Group were up just over 3%. The Co-op management has been selling unprofitable businesses and trying to create a new image under one logo.

Private bids up in foodservice

Private equity firms continue to make bidding forays into the restaurant trade. The latest to go is Paramount Restaurants, the owner of the Chez Gerard eateries, which is being sold to PPM Capital for £107.5 million. Paramount has 77 restaurants in the UK and made sales of £72m in the latest year to end June 2006.

Meanwhile, the owner of PizzaExpress, Gondola, has agreed a bid of £559 million from private equity specialist Cinven. The City's view is that the price offered is sky high in view of the possible downturn in consumer spending in response to rising interest rates and the high level of personal debt in the UK. However, Gondola's PizzaExpress, and the Zizzi and ASK chains, are enjoying excellent sales growth.

Food move for Mitchells & Butler

Mitchells & Butlers, the pub and restaurant chain, is focusing on its food sales ahead of the smoking ban, to be imposed in the summer of 2007. M&B is selling off 102 small pubs - which mainly sell booze - to Hemmings' Trust Inns for £101m. Hemmings' Trust

Inns are owned by Trevor Hemmings, who also owns Blackpool Tower, and has over 500 pubs throughout the UK.

Pubs'N'Bars looking for more inns