Six month results offer plenty of positives
PROFITS are up, turnover is up and the balance sheet is solid; the latest six month financial results for Scotmid make for positive reading.
For the 26 weeks ending 28 July, Scotmid posted a trading profit of £2.3m, an increase of 16% on the equivalent period last year, with turnover increasing by £3m to £184m.
While the society undoubtedly benefited from this summer’s warm weather, Scotmid chief executive John Brodie told Scottish Grocer the positive results are underpinned by successful initiatives and hard work.
“The exceptional uplift that we’ve seen – the 16% in trading profit – we have to reference the weather over the summer because that was the driver for the convenience business. But we would have had a solid set of results due to our initiatives and the hard work of everyone,” he said.
The warm weather may have tipped the balance in Scotmid’s favour, but the society has been busy striving to improve its food business through initiatives like the ‘make it simple’ programme, which aims to reduce unproductive tasks and simplify procedures across the business; investment in store revamps; and expansion of food to go.
And despite significant financial headwinds, including the apprenticeship levy, rising energy costs, business rates, National Living Wage rises and increased pension costs, Scotmid’s charitable work continues at pace.
“I think given the economic challenges we’re facing, I’m delighted that we’re still able to attain that level of charitable fundraising, because it is what we’re all about,” said Brodie.
There has been no shortage of charitable developments from the society over the last six months, with Community Connect – which offers grant funding to local causes – expanding from a trial in Scotmid’s north region into the east and west. Meanwhile, society members, staff and customers finished their one year partnership with Samaritans in August, having raised £315,000 for the charity.
Looking to the future, Brodie said the plan is to continually pursue improvements, trialling initiatives and, where they hit their mark, roll these out across Scotmid’s 180 store estate.
There are plenty of challenges on the horizon. Ongoing consolidation in the sector could create a trading environment in which the top two grocers make up more than half the market, but Brodie is confident Scotmid will continue to thrive by standing out from the competition.
“We are part of FRTS, and we come together as cooperatives and get buying scale by working together, but we’ll differentiate our offer for our customers’ needs,” he said.
The UK’s departure from the EU could bring a whole new set of challenges over the next 12 months, but again, Brodie reckons Scotmid has got the chops to tackle what lies ahead.
“There are challenging times ahead and there is particular uncertainty because of Brexit but, as we approach our 160th year next year, we’ll continue to focus on innovation, investment, and tight control of costs, to make sure we continue to progress,” he said.
