Achi news desk-
Scotmid reported a £1.3m rise in trading profit to £4.3m for the year ended January 27, with the improvement largely attributed to a cost-cutting campaign which has seen the organization move to a new action.
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The association, which reported an increase of £18.5m in turnover to £425m, noted that the financial year was dominated by the cost of living crisis, with consumer confidence down due to rising energy prices, high inflation, and higher interest rates.
Mr Brodie told The Herald: “I think it’s a good run of results against a challenging economic backdrop, but everyone has worked really hard. We have faced significant cost challenges and have restructured the business to deliver a new operating model fit for the future. Colleagues have worked very hard to achieve that.”
Scotmid said it was responding to rising costs by implementing a leaner structure that recognized the significant investment it had made in technology, while also maintaining its focus on managing store costs and profit opportunities. The number of staff in the field was rationalised, resulting in a “lighter touch” which gives greater autonomy to individual stores and empowers them to “deal with certain issues, rather than traditionally returning to the head office route”.
Thirty jobs were affected by the restructure, although Mr Brodie said some staff had been offered other roles while others had taken voluntary redundancy.
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Asked if cost pressures have started to ease or if there is any evidence of consumer confidence returning this year, Mr Brodie said: “We see the cost of living crisis continuing for some time. For both retail businesses [Scotmid and Semichem] that certainly affects consumer spending and consumer confidence, which is in very negative territory. Therefore, a return to a more vibrant economy where people have confidence and money in their pockets to spend will benefit those businesses in the future. That said sometimes, as we have seen in the past, challenging times can bring opportunities for Scotmid, given its financial strength.”
When asked if the co-operative would consider opportunities to buy shops, Mr Brodie said: “Certainly, we are very open to business given our financial situation. We’re in a nice position to be selective about what we want to go for, but if there are opportunities we’ll certainly look at them.”
Mr Brodie said the year under review had seen a “solid contribution” from the association’s property portfolio, which had benefited from “good commercial rent reviews and lower-than-expected bad debt levels”, despite market conditions affecting negative on property value.
The society’s net asset value fell by £1.7m to £120.8m due to downward property revaluations and pension movements but it declared that “our balance sheet remains resilient”, with net debt falling by £3.7m to £22.2m during the year .
Meanwhile, Scotmid Funerals held more funerals than the previous year as customers focused on more affordable packages.
Mr Brodie added: “Our membership and community team continued to provide funding, with donations going to a number of national charities and good causes as well as significant contributions through the Winter Giving project. Community Link awards were also presented at our AGMs and OGMs, and I’m pleased to report that the fantastic total of £295,000 was raised for our 2022/23 charity partner, Guide Dogs.”
Mr Brodie will step down in August following a “telegraphic” succession plan. Asked what the future held, he said: “My immediate plan is to have a period of rest and relaxation and reflection. It’s quite a laborious job. I’ve done it for 20 years and I’m thinking of having some downtime [will be welcome]. I’ll then consider what I’m going to do after that.”
