Scotmid profits down 25%
Scotmid Co-operative has reported a slump in its annual operating profits as it warned that there has been no discernible improvement in consumer confidence in the Societys core markets.
In the 52 weeks to 25 January 2014, the Scottish retailer’s operating profit before exceptional items dropped to £4.5 million from £6 million in the previous year.
Chief executive John Brodie said: “At this time last year I predicted a challenging year with a static marketplace and this has been the case. Consumer confidence in our core markets remains low and this is borne out by the Scottish Retail Consortium recording a like-for-like sales decline for the 2013-14 year.”
Brodie added that like-for-like retail sales were ahead of the Scottish market and that revenues had benefited from its merger with Penrith Co-operative. This helped total sales to rise by £3 million to £381 million.
However, downward pressure on prices and a further reduction in the Co-operative Group corporate dividend impacted on margins.
Scotmid operates stores in Scotland, the north of England and Northern Ireland. During the year, it decided to close six unprofitable Semichem stores and all of its Fragrance House outlets.
Brodie added: “The reported economic recovery appears to be specific to certain locations and sectors and is still not evident in our retail markets.
“There would normally be a time lag before any recovery filters down to consumers and so I do not anticipate a meaningful retail upturn in 2014. We will therefore continue with a measured approach to these difficult times, making hard decisions where necessary but with a focus on the development of new initiatives and continuous improvement.”
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