scotmid said yesterday that it outperformed a difficult retail market as it unveiled a small rise in both sales and profit for the last half-year.
Scotland’s largest independent retail co-operative said turnover for the six months to 26 July was £2 million higher than a year before at £212m, while operating profit was “slightly ahead” at £2.1m.
Chief executive John Brodie said it was a “satisfying set of results” after the business was able to mitigate the impact of the decline in the Scottish food market by closing some loss-making SemiChem shops and investing in some of its convenience stores.
He said the food market faced ongoing pressures stemming from the decline of wages over a number of years following the financial crisis, and the improvements being reported in the economy would take time to filter through to retailers.
Brodie said food prices had been in steady decline over the period, amid fierce competition among the various chains and supermarkets. Scotmid slashed margins to keep hard-pressed customers happy with £1 offers on basics such as bread, butter, eggs and milk.
Supermarket chains such as Tesco have been hit by the emergence of new competitors Aldi and Lidl, but Brodie said they did not appear to be infringing on Scotmid’s territory.
“Economics are the biggest challenge we all face,” he said. “Our experience is that it will take several years of positive economic indicators before it results in people spending more in our tills.”
Scotmid, which does not publish like-for-like sales figures, expanded its convenience store network into England for the first time last year with the acquisition of nine Penrith Society stores.
Brodie said the integration was proceeding well, with two of the outlets refitted to Scotmid’s more upmarket “premium fresh” format.
He said the business would seek to expand its network in Scotland, albeit gradually, and was also opening more funeral homes.