SCOTLAND’S largest independent co-operative, Scotmid, has warned that inflationary pressures including the cost of living crisis and low consumer confidence will continue to challenge the retail, funerals and property business in the short term although the group saw trading profits rise to £1.5 million for the 26 weeks ended July 29, 2023 – up £0.4m on its interim results last year.
The Edinburgh-headquartered co-operative’s chief executive John Brodie, who has announced his intention to retire next year after more than 30 years with the business, 20 of those as CEO, said: “With the current market and economic challenges, it was expected that our profit levels may not be maintained in the first half of the year.
“However, innovation and cost control by the team, as well as head office restructuring earlier in the year, has allowed us to deliver a solid performance. We have proactively identified areas for continuous improvement in the period, allowing us to best serve our customers and communities, and maximise sales opportunities.”
Turnover was up by £12m to £212m with net assets increasing to £122.8m. Scotmid said the result was achieved despite costs continuing to increase, high inflation and the cost of living crisis having an impact on household income and discretionary spend.
Mr Brodie noted that shoppers were buying less and switching brands in Scotmid’s 187 food stores, noting that people were looking for the best value as they manage their household budgets. “The cost of living crisis, increasing interest rates, high inflation and low consumer confidence continue to challenge our business,” he said.
Scotmid declares trading 'much more challenging than expected'
“Similarly, these challenges have impacted our customers with income squeezed and less confidence to spend in the retail marketplace. We continue to face substantial external challenges, so remain cautious with a firm focus on efficiency and innovation as we move into the second half of the year.”
Mr Brodie, 59, who confirmed he will retire in August 2024 with the process of finding a successor already under way, added: “Guided by our core purposes, Scotmid will remain attentive to these short-term challenges, while looking for long-term opportunities for growth underpinned by a strong balance sheet.”
Scotmid, which is based throughout Scotland, the north of England and Northern Ireland, operates 187 food stores, 63 Semichem outlets, 16 funeral Hhomes and an extensive property portfolio, employing over 3,500 people.
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