The Courier & Advertiser (Perth and Perthshire Edition)
Mutual Scotmid sees profits push ahead in first half of year
Brexit impact and cost increases hit business
Scotmid yesterday reported a large increase in profits for the first six months of the year despite “continued uncertainty” in the retail sector.
Pre-tax profits in the mutual society rose to £1.4 million for the six months to July 29, compared with £378,000 for the same period last year.
Turnover was down slightly from £185.5m to £184.7m for the group which includes Scotmid convenience stores, Semichem chemists, a property business and funeral services.
A disposal of an Edinburgh investment property saw a £461,000 exceptional property gain and the group also benefited from lower financing costs.
In a trading update, Scotmid said the last six months had seen a “sluggish retail market” and the company had been impacted by cost increases from the National Living Wage, rates revaluation and Apprenticeship Levy.
Chief executive John Brodie said the company was focusing on improving its outlets rather than increasing its number of around 350 premises.
He said: “It’s been a solid start to the year despite a number of challenges – cost challenges and uncertainty relating to Brexit affecting parts of the business.
“We have driven our sales line through innovation, particularly around expanding our food to go offer.
“We have run a programme called ‘make it simple’ which has looked at process and efficiency improvements in store where we can utilise technology or change procedures to give us a more efficient operating model.
“We are focusing our investment on the stores that we have, including a major refit of our store in Coupar Angus and others in Edinburgh and Glasgow.”
He said he expected the challenging market conditions to continue.
“I expect the second half of 2017 to be equally or even more challenging, with increased cost growth from external factors and the continued market uncertainty over the Brexit outcome,” Mr Brodie added.
“Consequently we will continue to focus on innovation in order to overcome these challenges and invest for long-term sustainable growth.”
Scotmid recently launched a Community Connect trial in part of Scotland where shoppers can vote on which charities benefit from a pot of charity cash.