HUNDREDS of Hampshire Co-op employees are set for bonus payments of up to £500 after the business reported an 11 per cent hike in annual profits.

The Co-operative Group, which has 60 stores in Hampshire, including 35 in Southampton, said like-for-like sales at its supermarket business rose five per cent as cash-conscious shoppers turned to its local convenience stores.

Bosses confirmed bonus payouts of £500 for full-time staff and a pro-rata windfall for part-time employees.

Co-op regional manager Gary Metcalfe said: “This is great news. I am delighted for our 1,200 dedicated staff in Hampshire who are once again being rewarded for all their hard work. “It is particularly pleasing given the current climate.”

Three million customers members of the Co-operative Group will also get a share of a £50 million “divvy”, or dividend, on annual £218m pre-tax trading profits. The payout pot is up £5m on last year.

The payments are based on each customer’s spending within the group’s businesses over the year.

Following its £1.56bn takeover of Somerfield the mutual is the now the UK's fifth largest food retailer, the third largest pharmaceuticals chain, the biggest provider of funeral services and the largest independent travel business in the country.

Chief executive Peter Marks hailed the record results from a “rejuvenated” Co-op.

“At a time when the economy is struggling and many business models are coming under intense pressure we truly believe that The Co-operative Group is coming into its own,” he said.

Co-op, which prides itself as a customer owned group with an ethical focus, said it contributed £11.5m to the community in 2008, up ten per cent on the previous year.

The payouts to staff and customer members are subject to final approval following the Co-op’s annual meeting next month.