Scotmid hails sales hike amid higher costs in 160th year

● Revenues rise as convenience stores and property arm offset Semichem woes

Scotmid Co-operative has overcome increased cost pressures to post a rise in annual sales after the hottest summer for decades boosted trade.

The Edinburgh-headquartered convenience store retailer has recorded turnover of £378 million for the year ended 28 January, an increase of £4m on the previous year.

Group operating profit grew by £300,000 year-on-year to reach £8.3m.

However, results at Semichem, the society’s embattled health and beauty products division, were marginally down due to “poor” market conditions.

Chief executive John Brodie told The Scotsman that the company is “very much investing in trials to look for a future sustainable business for Semichem”, on the back of the closure of several loss-making stores in recent years.

This includes rebranding two stores as SC Beauty, reductrading ing its warehouse headcount and experimenting with store layouts and ranges.

Scotmid pointed to last year’s heatwave – the hottest summer on record in 40 years – as a key driver of revenues at its food convenience business, which mitigated the impact of costpressuresincludinghigher business rates, energy bills and employment costs.

Store refurbishments in East Calder, Moredun, Bankton and Uddingston led to increased energy efficiencies, while the roll-out of new additions to its “food-to-go” offering lifted sales.

Group trading profit, which excludes exceptional items, surplus or loss on the disposal of fixed assets, and investment property revaluation, was up 11 per cent to £5.3m.

Brodie said: “We’re pleased with the results for 2018 against a backdrop of a weak economy, structural changes, increased regulation and the cost pressures that we’ve faced, and obviously the uncertainty facing consumers surrounding Brexit.

“To deliver the increase in profit that we have is a real credit to everyone in the business.”

The group cited increased competition as a major cause of a mixed year for Scotmid Funerals, where sales remained flat, while hailing a record contribution from its property arm.

The co-operative, which is scheduled to celebrate its 160th anniversary in November, also unveiled its strongest balance sheet yet, with assets of £103m. It closed the year with a £3.3m reduction in net debt to £29m.

Brodie added that the society is always on the lookout for new investment opportunities, citing the group’s decision to last year take a stake in Glasgow soft drinks firm The Start-up Drinks Lab.

He said: “We’ll continue with our philosophy of continuous improvement and focus on innovation, effective investment and tight control of costs to take the society forward.”

Scotmid currently has more than 300 stores in Scotland, Northern Ireland and Northern England, in addition to a portfolio of around 450 properties.