Profits rise at Scotmid in struggling market

RETAIL: Warning of need for tough decisions from impact of living wage

Scotmid Co-operative delivered a higher trading profit despite a poor Scottish retail market last year.

Turnover at Scotland’s biggest retailing mutual society which operates food, Semichem, funeral branches, post offices and a property division was down 3% at £370.6 million.

Trading profit for the 52 weeks to January 30 was up 4% at £5.7m from the 2015 figure of £5.53m recorded over 53 weeks. The pre-tax surplus (profit) was up 71% at £5.446m

The society hailed a strong balance sheet with assets in excess of £91m, and said its retail business consistently outperformed the market.

Chief executive John Brodie said: “Our performance strengthened in the second half of the year with comparable retail sales very positive relative to the sluggish market.”

A week less and the impact of some store closures resulted in a reduced turnover, but he welcomed a stronger balance sheet.

The Scottish Retail Consortium had reported average like for like sales down 2.4% reflecting low consumer confidence, price deflation and poor summer weather.

“The society’s retail businesses consistently out-performed the market in 2015 with successful implementation of our new Semichem strategy and initiatives in Scotmid’s community convenience stores,” Mr Brodie said.

There were also successful initiatives in the food business and the buying group FRTS to offset the impact of food price deflation and boost competition.

Semichem made good progress driven by sales growth in fragrance and new private label ranges.

Scotmid Property enjoyed another year of growth, and funeral made steady progress in the first half.

Mr Brodie believed cost pressure from the earlier than anticipated introduction of the National Living Wage will impact on the next few years, especially on Scotmid’s food business.

The society will take “the tough decisions required, accelerating continuous improvement initiatives and continue to innovate to drive the business forward”.

Scotmid employs more than 4,500 staff in 350 retail and service outlets across Scotland, Northern Ireland and the north of England.

Semichem’s progress helped Scotmid’s performance.