Mixed impact on Scotmid sales as virus eclipses year-end results

Speaking as the grocery, toiletries, funeral and property co-operative posted a 5% increase in trading profits for the year to January 25, Mr Brodie said food retailing in the weeks since the pandemic took hold has varied from store to store. Meanwhile, all 87 of the group’s Semichem toiletries shops have been closed since March 26, with 750 staff on furlough.

Scotmid’s convenience stores average about 2,500sq ft, and have driven sales in recent years through the development of the chain’s “food-to-go” range. Stores in areas normally populated by large numbers of workers have seen a decline in sales of takeaway breakfast and lunch, though others have seen an uplift as customers have increasingly opted to shop locally.

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Scotmid has had to absorb the impact of “significant” numbers of self-isolating staff, though levels have eased from earlier peaks. With the programme of protective measures within stores continuing to evolve, Mr Brodie said it was too early to be definitive on those costs, though “it is going to run to a significant number”.

As for the outlook for the rest of the year, much hinges on how things unfold in the coming weeks.

“We are still in the early stages – it has only been a few weeks of lockdown so far,” Mr Brodie said. “Until we get clarity of what unlock looks like, and see how habits are affected and what changes will come into place, it is too early to say.”

The pandemic has overshadowed what was meant to be a celebratory end to the 160th anniversary of Edinburgh-based Scotmid, which employs a total of 3,900 people across its operations.

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Turnover in the 52 weeks to January 25 was £385 million, up from £377.9m a year earlier. Trading profit was £5.6m against £5.3m previously.

A £618,000 reduction in exceptional costs was not enough to offset a decline in profits from fixed asset disposals. Taking these items and investment property revaluations into account, operating profits were £7.6m, down from £8.3m the previous year.

Mr Brodie said all four divisions within Scotmid delivered improvements last year, though no individual breakdowns were provided. He described this as a “pleasing” result against an unfavourable background, particularly for retail businesses.

Convenience food stores achieved like-for-like growth ahead of the Scottish market, driven by an ongoing programme of range improvements. Several refurbishments were completed during the year, including sites in Uddingston, Inverness and Inverkeithing, while a new store was acquired in Coatbridge.

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The group noted that the cost of trading continued to rise through the year, with increases in employment costs, distribution charges and waste packaging levies.

Semichem delivered an improved performance on the previous year, and a “substantially better performance” than the trend in an extremely tough market for non-food retailers. This was led by Scottish stores sales, while those in Northern Ireland continued to be disproportionately hampered by Brexit uncertainty.

The fluctuating position on Brexit during 2019 also depressed transaction volumes on the commercial property market, where Scotmid holds investments in retail outlets, offices and trade counters. However, residential property remained relatively strong and posted growth during the year. The overall value of the property portfolio now stands at more than £94m.

Scotmid Funerals had a strong finish to the year after a comparatively weak first half. General demand for funeral plans fell amid economic uncertainty and the ongoing Treasury review of the funeral plan market.