The Co-op saw a �5.4bn income rise in 2002

Annual profits have gone up by 38% for the group of consumer-owned societies including supermarkets, travel shops and undertakers.

Turnover increased by 6.4% to �13.3bn, while net profits rose to �441m from �320m, year on year.

The latest figures were announced at the annual Co-operative meeting in Manchester on Sunday.

Co-operatives UK chief executive Dame Pauline Green said there had been a "gradual and solid" improvement over the last five years.

"Our improvement in both profitability and market share is the result of a greater focus on business performance, acquisitions and improved financial management," she said.

The Co-op's acquisition strategy in food retailing, which has pushed its share of the food market up from 5.6%to 6%, the Press Association reported.

Co-operatives UK, formerly known as Co-operative Union, brings together thousands of individual co-operative businesses.

The strongest performing societies include Lothian, Borders & Angus with profit as a percentage of sales rising to 7%, the Press Association reported.

The latest figures covers the periods ending September 2003 and January 2004.