Scotland’s largest independent retail co-operative yesterday said it is encouraged by last year’s “solid” figures, posting a £5million increase in pre-tax profits despite a challenging declining retail market.
Scottish Midland Co-operative Society (Scotmid) said sales at its convenience food business had stayed ahead of the market thanks to a diversification programme that involved opening bakery counters in 180 of its stores.
The Edinburgh-based company also introduced of discounts on essentials like bread milk and butter, a policy it aims 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.
Scotmid chief executive John Brodie said he remains cautious about the prospects of retail growth in the year ahead, citing low levels of consumer confidence in Scotland, particularly in retail.
Scotmid — which operates a combined total of about 300 convenience food stores, Semichem outlets and funeral parlours across Scotland — made operating profits of £5.5million for the 12 months to January 30, up £1million year-on-year.
Scotmid recorded pre-tax profits of £2.2 million for the year ended January 30, 2015, against a loss of £3million a year earlier, as turnover went up £5million to £436million.
Scotmid, which also runs a residential and commercial property division, employed 4,660 staff members on average during the period in question, compared to 4,811 a year earlier.
Its net assets went down £3.4million to £86million.
Scotmid said it has taken steps to put Semichem on a firm footing through “control of costs, vigorously negotiated property lease renewables and a review of business strategy.”
However, the health and beauty products seller still bore the brunt of the store closures, with 15 to 20 shuttered over the last year, and the process of reviewing loss-making stores will continue as property leases come up for renewal.
Mr Brodie said: “Tough decisions taken in 2013, and which we continue to take, have helped Semichem make good progress over the past year despite the Scottish non-food market declining by 2% over the period.
“The action taken by the Society, especially with landlord negotiations on property lease renewals has improved our Semichem business.”
Meanwhile, Scotmid’s funeral business had a good second half of 2014 as death rates started to level off after a number of years of decline.