Bosses at the Midcounties Co-operative say they have "risen to the challenge of the credit crunch" and achieved a record rise in its fortunes.

Profits at the firm which has its head office on Botley Road, Oxford, have soared by 61 per cent to £10m in the six months to July 26, with performance particularly strong in food retailing where sales were up 10.7 per cent to £237.7m.

The company also reported significant improvements in the performance of Midcounties' Travel and Funeral businesses. Overall sales increased by eight per cent to £379m.

Chief executive Ben Reid said: "We are very pleased with these half-year figures which are a result of our strong focus on the day to day business operations, customer service standards and a great retail offer.

"However, we are very aware of the significant challenges that lie ahead. Our customers are suffering from the dramatic increase in energy costs and from the credit crunch and consumers are tightening their belts. We, like all retailers, are facing significant increases in operational costs."

Society operating profits for the six months doubled to £12.5m with several property sales resulting in income of £2.5m.

A total of £54,000 was donated to 264 community projects.