Chelmsford Star Co-op welcomes signs of growth after ‘challenging years’

'The challenge for the second half of the year will be to reverse the trend of the under-performing trading divisions'

Chelmsford Star Co-operative has recorded a year on year growth in sales of 7.4% in its interim report for the 28 weeks to 12 August 2017.

Trading surplus before depreciation was £1.5m, down slightly from £1.6m for the same period last year, but gross takings were £59m, up from £55m.

The report said: “Overall trading performance is beginning to show signs of growth after a number of challenging years.

“The society’s acquisition and refurbishment strategy in food is delivering growth in turnover, aided by operational improvements and inflation.

“The challenge however, is achieving growth in all trading divisions. While inflation is currently assisting growth, it will ultimately impact consumer spending, squeezing household income and spending power.

“In addition, the continued Brexit related uncertainty means that the positive start to the year in terms of turnover growth cannot be taken for granted.”

The Essex-based society refurbished six food stores during the period, and added another store to its estate, at Woodford Green – but took the “sad decision” to sell the Meppel Avenue store on Canvey Island.

The food business, including fuel, recorded a “year on year” decline in trading profitability but the report says the result is 5.4% ahead of the business plan, which had anticipated a higher increase in operating costs.

Department stores saw a “year on year” decline of 4.3% in sales. “Despite improved efficiencies and cost control, the business’s trading loss has increased to 2.5%, a level greater than last year and than that envisaged within the business plan,” the report says.

“The departmental store business continues to review its operation and review trading partners and brands that may be attractive to our members and customers.”

There was a mixed performance at Travel, with turnover up 11.8% year on year. The main driver of growth is currency, which is a lower margin product, affecting trading profitability of the business, which has fallen £13,000 or 11.3% below last year.

The funeral arm has faced growing competition with sales 14.7% down on last year, and trading profit has fallen by £112,000 or 51.4%, “well below the level envisaged within the business plan”. A strategic review of the business will be implemented later this year, says the report.

But food core categories, fuel, travel and investment property are delivering growth, the report adds, with gross profit of £12.9m compared to £12m last year, representing growth of 6.6%.

“The society’s overall performance in the main is in line with the expectation of the board and business plan,” adds the report. “However the challenge for the second half of the year will be to reverse the trend of the under-performing trading divisions, which if left unaddressed could undermine the society’s result.

“A number of strategies are in the process of being implemented to address these areas, the efforts of which should be evident come year end. Your society continues to react, adapt and evolve to the challenges that we face.”

The society celebrated its 150th anniversary this year, with a temporary exhibition at Chelmsford Museum, a celebratory book of the society’s history and a commemorative Fairtrade chocolate bar commissioned.

A total of £34,320 was raised for the Society’s Charity of the Year, Kids Inspire. Following a colleague ballot, this year’s Charity of the Year is Little Havens Hospice.

In this article

Join the Conversation