Scotmid profits hit £5.5m but boss remains cautious
Scotland’s largest independent co-operative, Scotmid, has announced a £1m rise in operating profits today, reaching £5.5m for the year ending 31 January.
The Scottish Midland Co-operative Society said turnover has increased £5m to £436m as continued investment in business improvement and brand modernisation continues.
The co-operative said it is encouraged by last year’s “solid” figures despite posting a 27 per cent drop in pre-tax profits against the backdrop of a declining retail market.
Speaking on today’s results, John Brodie, chief executive of Scotmid, sounded a note of caution as he highlighted that Scottish consumer confidence, especially in food retail, remains low with disposable income reported to be at a 10 year low and the Scottish Retail Consortium reporting a decline in like-for-like sales of 2.6 per cent for the 12 month period.
The Edinburgh-based company introduced discounts on essentials such as bread, milk and butter last year to meet the challenge, a policy it hopes to continue. But “tough decisions”, including the closures of several of its Semichem toiletries outlets, had to be made over the last year to ensure the group’s growth, Scotmid said in its annual report.
Mr Brodie expalined: “These are a solid set of figures, helping to deliver a like for like sales performance which has been consistently ahead of the market.
“Throughout the year we have continued to take tough decisions and continued our programme of differentiation to help ensure sustainable profitability and growth going forward.
“The retail landscape continues to change rapidly as highlighted by announcements from all the major multiples to change strategies including decisions on store closures and future direction.
“The past 12 months has seen us progress our vision for ‘Food’ which has helped differentiate us from the competition with a real focus on concept bakery, local products and the introduction of a number of key value lines.”
He added: “Although this is a positive set of results, it continues to be a challenging marketplace which requires us to innovate, work hard and, where necessary, take tough decisions. While remaining cautious and measured in our approach, the Society will continue to drive new initiatives and look for other potential areas for growth.”
The group boasted a strong balance sheet, with assets totalling £87m. Scotmid employs around 5,000 people in Scotland, Northern Ireland and the North of England across nearly 350 retail outlets.