The Co-operative Group reported a 17 per cent jump in profits to £260 million in the 26 weeks to July 3 on sales that grew eight per cent to £6.9 billion.

This is despite what chief executive Peter Marks admitted was a challenging year.

He said economic conditions across all the group’s businesses had been tough.

“Looking ahead, we do not expect things to improve until late 2011 at the earliest.”

The group, he said, had been transformed over the last three years, taking on Somerfield and merging its financial services arm with Britannia.

“The work already done, combined with the various innovations and initiatives being undertaken in our businesses, will strengthen the group and enable us to put even more space between us and our competitors,” said Mr Marks.

Although some of its non-food businesses had produced good results, the Co-operative admitted that electricals had been affected by the recession.