Sales jump at Edinburgh's Scotmid as shoppers stay local but tough decisions remain after Semichem blow

Co-operative food business Scotmid has seen its annual turnover and profits rise as the pandemic led to an increase in local essential shopping.

However, the Edinburgh-headquartered group, which runs hundreds of convenience stores, warned of “considerable planning uncertainty” surrounding the coronavirus crisis amid predictions of a fresh spike in cases heading into the winter.

While the core food retailing part of the business has performed well, particularly in local neighbourhoods away from city centres, other aspects of the group have faced challenging trading conditions and costs have risen as bosses implement Covid mitigation measures.

The group’s annual report and accounts come just weeks after it emerged that Semichem, the health and household goods chain owned by Scotmid, was looking to close about a quarter of its stores amid “ongoing challenges” to high street trading.

Scotmid's recently re-fitted Barnton store in Edinburgh.

The firm said it was consulting on the closure of up to 22 Semichem stores across mainly Scotland, plus Northern Ireland and the north east of England.

Revealing a £24 million increase in full-year group turnover to £409m, John Brodie, chief executive of Scotmid Co-op, said: “This was a year dominated by the pandemic and the significant but varying impact it has had on our different businesses.

“Changes in consumer behaviour during the pandemic resulted in an increase in local essential shopping in Scotmid’s food convenience stores. Customers visited less frequently, spent more each visit but the costs of operation were significantly more than usual.

“Like many other non-food retailers, Semichem was significantly impacted by the pandemic due to low footfall on high streets and a long period of closure in the first wave.

“Scotmid Funerals conducted more funerals but at a reduced income per funeral due to safety and social distancing restrictions.”

The group delivered a £6.4m trading profit for the 53 weeks ended January 30, compared with £5.6m for the prior 52-week period. It also highlighted a strong balance sheet with net assets amounting to £103m.

Brodie said: “Financially, it was a tougher second half to the year with the cost burden increasing but with the benefit of our diverse set of businesses, backed up by government support, we have successfully co-operated together across all levels in the society to deliver a strong year-end result.

“Looking forward, we still face considerable planning uncertainty surrounding the timing of the end of the crisis and the likely post-pandemic impact.

“Therefore, with our continuous improvement mind-set, we will continue to adopt a flexible approach and focus on matters under our control to deliver our core purpose of serving our communities and improving people’s everyday lives.”

He said the group, whose trading roots go back more than 160 years, had helped hundreds of local community groups and larger charities to alleviate hardship through a Covid community fund. A free home delivery service to those shielding was made available with charity partner, Chest Heart & Stroke Scotland.

Last month, management at Scotmid said they were exploring opportunities to redeploy as many Semichem workers as possible within its wider business. Brodie said “tough” decisions had been taken but also noted that talks were taking place with landlords over some of the affected stores.

Semichem was founded in 1980 and became part of Scotmid Co-operative in 1995. It operates more than 86 stores.

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