But the group said its undisclosed like-for-like sales performance was "ahead of the market", and that it had escaped the brand damage fall-out from the woes of the Cooperative Group.
Scotmid said there had been "no discernible improvement in consumer confidence" in its core markets, and chief executive John Brodie commented: "Our expectation is that there is going to be a time lag between economic statistics saying things are getting better and that translating into our tills."
He said the Scottish Retail Consortium had reported an average decline in 2013 sales of about 1%, and Scotmid had bettered that, but added: "It is not a great market to be operating in when just about every month it shows a decrease on the previous year, particularly around December, though less so now for food."
Mr Brodie said Scotmid had continued to invest, with 10 more stores converted to its Premium Fresh format, 84 new in-bakery counters, bigger fresh ranges in 90 stores, and "a fair bit of innovation going on in the business".
He said the much-trumpeted advance of discounters Lidl and Aldi had been largely at the expense of the biggest retailers, but added: "All fascias effectively recognise it is a very price-competitive market that we operate in, whether it is the major multiples, local operators, the discounters, or indeed ourselves - we have introduced a number of more value-focused lines."
The accounts show a £3m pre-tax loss for 2013-14, after profits of £1.2m, £2m, £11.2m and £5.6m respectively in the previous four years, and despite a £1.8m profit from its property portfolio. Net debt rose by £6.6m to £39m.
The group took a £4m exceptional hit largely from writing down the value of its Semichem pharmacy chain. Scotmid said in January it was having to close six Semichem stores with the loss of 90 jobs and end the four-year trial of its six upmarket Fragrance House stores.
Mr Brodie said the group had tried to keep Semichem stores open despite unchanged rents for poorer locations, and would now seek to renegotiate leases. "Our desired outcome is to seek rent reductions and keep stores trading," he said, adding that Fragrance House, launched into the teeth of the recession, had "brought a number of benefits to our Semichem business".
On the issues that have dogged the Cooperative Group, Mr Brodie commented: "Our governance we would say is fine and absolutely different from theirs. We are a different business and indeed Lord Myners made the point that there are a lot of well-run and well-governed independent cooperatives out there."
He said Scotmid members continued to support the development of the society's membership and democratic structures, and added: "I think it's beneficial we have our Scotmid brand but I think the brand 'Cooperative' is not as highly regarded as it would have been before - it has been very highly regarded for a very long time and will be in the future."
Overall sales did rise by £3m to £381m, partly thanks to a merger with Penrith Co-operative, which brought nine stores and 170 staff. Mr Brodie said the society was "happy to have discussions" with any group seeking a merger. The Scotmid balance sheet saw assets dip by £4m to £90m, but they are still above the 2009-10 level.
During the year the group made a strategic investment in Edinburgh, snapping up 12 flats in Blair Street from an administrator. The funeral business also made progress, opening three new funeral homes.
Mr Brodie concluded: "The reported economic recovery appears to be specific to certain locations and sectors and is still not evident in our retail markets - Scotland, Northern Ireland and Northern England.
"We will therefore continue with a measured approach to these difficult times."
Scotmid, founded as St Cuthberts in 1859, employs almost 5000 in 350 outlets across Scotland.