Not even summer washout stalls Scotmid growth but co-operative still facing ‘challenges’

Scotmid, the Scottish co-operative business with trading roots stretching back more than 160 years, has notched up first-half growth despite the summer washout dampening customers’ willingness to spend.

New chief executive Karen Scott, who took over from long-standing boss John Brodie last month, described the past few months as “challenging”. Despite that, the society delivered a £2.1 million trading profit for the 26 weeks ended July 27, a £600,000 improvement on the interim result for 2023. Total turnover was up by £2m to £214m.

Scott said the energy crisis which peaked in 2023 began to ease and inflation started to cool. However, the business still faced significant cost challenges including high interest rates and wage costs.

The society, which has roots going back to 1859, runs hundreds of Scotmid convenience stores.

The society has been at the heart of Scottish communities since 1859. These days its businesses encompass Scotmid Co-operative, operating hundreds of local convenience stores, Lakes & Dales Co-operative, Semichem, its funeral division, post offices and property investment. The Edinburgh-headquartered group employs almost 3,500 people in Scotland, Northern Ireland and the north of England.

Scott said: “With difficult economic conditions, the first half of the year was challenging. However, tight cost control, utilisation of technology and a focus on pleasing our customers has allowed us to deliver a result ahead of last year. We have again remained committed to continuous improvement, which has helped to maximise sales opportunities.”

The core food convenience division was said to have been “significantly impacted” by the wet summer weather, which had a knock on effect on customers’ willingness to spend. As a result, footfall and volumes fell. However, the division still reported year-on-year growth thanks to “tight cost management”, promotional activity and events such as Euro 24.

Scotmid Funerals recorded a reduction in the number of funerals conducted, in line with market trends. The group noted that more people had also shifted to direct-to-cremation funerals. Scotmid’s property business continued to grow thanks to “positive” rent reviews, careful management of voids and “strategic investment decisions over many years”.

Scott added: “The challenges facing the society continue to have a significant impact on consumer spending and, hence, trading performance. The headwinds of the cost-of-living crisis and high interest rates had impacts, but the biggest single factor affecting the interim results was undoubtedly the exceptionally wet summer weather. Despite this, Scotmid showed resilience, delivering growth in trading profit underpinned by a strong balance sheet.”

She also paid tribute to her predecessor, Brodie, who retired in August after 30 years with the society - 20 as chief executive.

“I would like to note my thanks for his dedication to Scotmid and leadership of our team over the years,” Scott said. “His legacy will live on as we remain focused on continuous improvement and, of course, our core purpose of serving our communities and improving people’s everyday lives.”

The society said it would continue to invest for future growth and has carried out further retail upgrades across several sites, including a focus on food-to-go enhancements. Spend was closely managed given high market interest rates.

Scotmid chief Brodie bows out after 20 years leaving ‘strong and resilient organisation’