Co-op chief - We'll keep on buying up food stores.

Byline: By Ben Griffiths

The Co-operative Society yesterday pledged to continue its acquisitive strategy following the purchase of convenience chain Alldays.

The pounds 133m acquisition in October saw the Co-op become the UK's biggest convenience operator. Manchester-based Co-op has around 1,200 convenience stores, as well as 500 supermarkets, following the Alldays deal.

Chief executive Martin Beaumont said: "Alldays gave us critical mass in a sector where we perform strongly.

"We do not intend that to be our last major acquisition in food retailing, though we are prepared to wait for the right opportunity to come along."

City analysts are expecting rival retail chains to try and snap up any left-overs from the takeover battles for Safeway and Somerfield.

Losing bidders or stores currently on the sidelines of the deals could step in to buy up unwanted parts of the chains.

The Co-op's retail team is piloting the "Co-op Welcome" store format in 10 Alldays stores which have seen sales leap by 30pc and plans are in hand to begin the roll out to the remaining 600 stores later this year.

Reporting its financial results for 2002, the mutually-owned society said income had risen pounds 2.4bn to pounds 7.8bn in 2002.

Total food sales rose 9pc to pounds 2.6bn in the year with profits ahead by 52pc to pounds 69.5m. Store refits and a marketing campaign to highlight the Co-op's convenience offering and ethical stance helped boost profits, the society said in a statement.

In November, the Co-op converted its entire own-brand range of chocolate to Fairtrade, the ethically traded product range.

For its other units, the Co-op said the funeral operation kept market share at 14.4pc, making it Britain's largest funeral provider. But profits at the business were down by pounds 3.1m to pounds 12.7m due to the falling death rate.

Despite the tough trading conditions, the Co-op's travel business increased sales by 6.2pc to pounds 401.5m and reduced its losses to pounds 400,000 from pounds 3.7m in 2001.

The Co-op's financial services business merged banking and insurance arms in an effort to sell products between customer bases.

The operation has more than six million customers, pounds 28bn in assets and employs more than 15,000 staff.

Banking recorded its ninth year of record profits, up 14pc at pounds 122.5m.

Results from the Group's CIS insurance business were hampered by falling stock markets which forced the Co-op to take a pounds 285m charge for the year.

Business from life, pensions and unit trusts fell to pounds 187m, down 25pc on 2001. For the group, operating profit before one-off costs was up from pounds 165.8m to pounds 231.4m.