Scotmid has announced a £5.5m operating profit, an increase of £1m on last year.
Turnover at Scotland’s largest independent co-operative rose from £431m to £436m, but chief executive John Brodie warned that consumer confidence in retail remains at a low.
During the period, the Scottish Retail Consortium reported a decline in like-for-like sales of 2.6% – a 10-year low. Food sales were also affected by the loss of the corporate dividend from the Co-op Group.
Mr Brodie said: “These are a solid set of figures, helping to deliver a like-for-like sales performance consistently ahead of the market.”
Against tough trading conditions, Scotmid cut costs in support services and its warehouse, and closed loss-making Semichem and Fragrance House stores. The number of employees fell from 4,811 to 4,660 during the year, but overall the wage costs rose by £469,000 to £50.55m.
“Tough decisions taken in 2013, which we continue to take, have helped Semichem make good progress over the past year despite the Scottish non-food market declining by 2% over the period,” said Mr Brodie.
“Action taken by the society, especially with landlord negotiations on lease renewals, has improved our Semichem business.”
Two smaller stores at Westgate and Hallbankgate are set to be closed, the society added, but, if possible, they will be sold as a going concern with a preference for purchase by a local community co-operative.
Throughout the year, £260,000 was spent on community and co-op initiatives, amounting to 5% of operating surplus before exceptional items. Of this, £12,000 was invested in co-op initiatives, compared to £29,000 the previous year.
Member economic involvement rose to 14% from 12% last year.
The society’s vision for Food has helped to “differentiate us from the competition”, said Mr Brodie. He said there was a “real focus on concept bakery, local products and the introduction of a number of key value lines” across the store estate.
Other areas of the business were also strong, he added. “Investment in commercial and residential markets helped Scotmid’s property division deliver another good year.
“Scotmid Funerals has performed well and it is highlighting the fact that after a number of years of decreasing death rates, these have now started to level off.”