Operating profits at The Co-operative Pharmacy soared 11.7 per cent to £33.4 million before significant items for 2010. Pharmacy sales increased 3.5 per cent to £771.3m following an "impressive improvement in performance", the Co-operative Group reported.
Co-operative Group annual sales rose 9.1 per cent year on year to £13.7 billion.
Co-operative Group praised its pharmacy division for maintaining its market share and improving performance despite "tough economic conditions and increased competition from food superstores". A "significant investment" in technology, the launch of its first ethical strategy and new pharmacy services such as flu vaccination were cited as contributing to its success.
But the Co-operative Group warned that 2011 promised to be a "challenging year" for pharmacy because of government funding clawbacks. "Our business model is strong, however, and the senior management team is geared towards driving good profits for the business and excellent products and customer service," it stressed.
Co-operative Group chief executive Peter Marks said that he anticipated "challenging trading conditions" across all divisions of the company.
"Looking ahead, we had hoped to see signs of economic recovery by the start of 2011, but the downturn is clearly biting deeper than we had expected," Mr Marks said. "We now anticipate challenging trading conditions through to the end of this year and into 2012."
Mr Marks added: "That means we must make even greater efforts to ensure we are responding to the needs of our members and customers and are giving them good reasons to continue to trade with us."