Chelmsford Star Co-operative has released its annual results for the year to 27 January, with trading profit after depreciation down 28.5% to £1,098,714 (2017: £1,536,729).
Gross takings were £110,413,252, up 6.6% from £103,584,570 last year, and gross profit was £24,001,745, up 6.2% from £22,594,252 in 2017.
The report says: “The increase in gross profit reflects a full trading year for the acquisitions made in 2016/17 and the ongoing investment in the food refurbishment programme.
“Your society operates a lean operation, ever since the difficulties of the 1990s. This means that, while other businesses are reviewing and removing cost to combat increasing cost pressures, this is not an option for the society.
“Additional costs incurred in the year include the full trading year for the three additional stores acquired part way through last year, plus a new food store acquisition and a new funeral unit from this trading year.”
Net profit was £914,833 and, after meeting the costs of all distributions, the society achieved a surplus of £180,276, (2017: £367,314) which has added to the society’s reserves.
The report added: “The UK’s decision to leave the EU will fundamentally change the outlook for the retail market. This coupled with inflation returning to the grocery market and below inflationary pay rises for many, creates an uncertain market.
“The cost pressures for business continue to rise through exchange rate fluctuations, increases in the National Living Wage and legislative changes resulting in additional cost burdens. Competition in all the society’s trading divisions is increasingly evident.
“Against this backdrop the society has fared well in terms of turnover performance and growth, but has undeniably been affected by these economic factors which have undermined the society’s result. The board keeps under regular, monthly review the trends in terms of turnover, cost and profitability, and strategies are implemented to mitigate the impact where possible.”
At the society’s Food business, gross takings excluding fuel were £84,294,402 (2017: £78,287,724) a like for like increase of 2.4% taking into account changes in its estate.
During the year, Chelmsford Star acquired an additional convenience store in Woodford Green, further expansion inside the M25, and eight stores were refurbished as the society accelerated its store upgrade programme. This added to operating costs but brings “longer-term benefit”, the report says.
Gross takings in the society’s department stores fell 5.3% to £9,892,044 (2017: £10,446,027), with economic uncertainty and increased competition affecting furniture sales. Trading losses have increased to 1.46% (2017: 1.37%) and “work is ongoing to ensure trading losses are mitigated and controlled wherever possible”.
In the travel division, gross takings rose 10.5% to £9,696,000 (2017: £8,774,899) . Trading profit has fallen 1.0% “year on year” but the business has “far exceeded the expectations of the Board and the business plan”.
For funerals, gross takings fell 5.3% to £1,707,945 (2017: £1,802,305) and a full strategic review of the business has been conducted following a difficult first-half performance, with a rebranding and upgrade of sites to the new fascia and style. “Trading profit … amounted to £180,169 compared to £293,093 last year, a reduction caused by performance in the first half of the year, the set-up costs for the new branch and the additional investment required as a result of the strategic review.”
The report said changes to funeral pricing policy and the website have “increased the transparency, flexibility and ease” for clients. It added: “The figures are demonstrating an improvement on the previous trend.”
In November the society opened another funeral home in the George Yard Shopping Centre, Braintree, and has extended its bereavement support to the under 50s.