Scotmid Co‑op has reported a “resilient performance” for the year to 31 January, with a £1m trading profit and sales rising £3m to £432m.
This was achieved despite significant supply chain disruption caused by last May’s cyber attack on the Co‑op Group, Scotmid’s biggest supplier, and continued cost pressures across the retail sector.
Scotmid says disruption from the cyber incident had a material impact on its retail trading, particularly in the first half of the year, disrupting stock availability. This compounded wider market challenges, it added, including rising labour and compliance costs, increased pressure on already squeezed household budgets and heightened competition.
Performance improved as the year progressed, the report adds, “with recovery in the second half underpinned by a return to normalised product availability, a continued commitment to customer value and a firm focus on operating discipline”.
The society says its diversified business model also contributed to resilience, with “solid” performances from its funeral and property divisions.
Loss before tax was £1.5m reflecting the reduced trading profit due to the impact of external disruption as well as society transformation spend. By year end, the society says it financial position had strengthened, with net assets increasing to £128.9m and net debt reducing to £21.1m.
Capital spend continued across the store estate, including a multi‑million technology upgrade to improve convenience and customer experience through the rollout of new tills and self‑scan checkouts in all stores.
Investment was also made in new stores and in local job creation, added Scotmid. The society hailed a “return to its roots” with the opening of a new 4,000 sq ft food store in Fountainbridge, Edinburgh, near the site of the original St Cuthbert’s Co‑operative headquarters. A new concept store at Scotmid’s retail park in Uddingston is scheduled to open on 30 April, with a further new store planned for Burghead in Moray this summer. In addition, further investment has been committed to upgrade the existing store in Burnhead, North Lanarkshire.
Scotmid added that it continued to invest in its communities throughout the year. This included £537,000 donated to charities and good cause groups, supporting more than 1,000 local projects, alongside successful charity partnerships with Maggie’s, which received a donation of £288,000 through fundraising efforts, and Alzheimer Scotland / Alzheimer Society which is Scotmid’s charity of the year for 2025/26.
“There is no denying that this has been a challenging year for the retail sector on multiple fronts,” said CEO Karen Scott (pictured). “The impact of the Co‑op Group cyber incident on our supply chain was significant and long‑lasting, and we have worked hard to recover from that disruption. Against that backdrop, these are resilient results and a real testament to the commitment and effort of colleagues across the society.
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“While the disruption caused by the Co-op Group cyber incident was most acute in the first half of the year, our response was swift and effective, and it was encouraging to see recovery strengthen as the year progressed.
“We have maintained revenue, delivered a trading profit, strengthened our balance sheet and continued to invest in our businesses and our communities. That reflects the underlying strength of Scotmid and the benefit of our diversified model.
“As a co‑operative, we take a long‑term view. We are owned by our members, not external shareholders, which allows us to reinvest in our business and our communities and remain true to our core purpose of serving our communities and improving people’s everyday lives.
“Looking ahead, our priorities are clear. We remain focused on strengthening retail performance, improving efficiency and continuing targeted investment to support long‑term sustainability and future growth.”
The results follow a number of consolidations in the UK retail sector, with OurCoop forming from a merger between Central, Midcounties and Chelmsford Star co-ops, and the Co-op Group and Southern planning a merger. Meanwhile the movement has faced probing questions in the press, with the Grocer recently asking, ‘Is the co-operative society movement still working in retail?”
Regarding the mergers, Scott told Co-op News: “We are fiercely independent and will continue to be that way, and we have a strong strong asset base and balance sheet – we have spoken about the about mergers taking place, we wish them all the best, but our position is strong.”
And she restated her faith in the co-op model. “It has been around for a number of years, has proven to be resilient over those years, and we’re at a time when people want to have businesses behave more responsibly.”
Co-operation among co-ops offers another source of strength, she added. “Working with our fellow independents is something we’ve done over a number of years, sharing best practice, and if we can do things better, collectively, we will.”’
Scotmid worked closely with Southern on a deal for shelf edge labels, said Scott, which brought an economy of scale, and other societies subsequently came on board. She also gives the example of last year’s power purchase agreement with renewable energy supplier RWE, negotiated alongside several other retail co-ops. The deal meets 40% of Scotmid’s energy needs, at a fixed price to offer some certainty on future costs.
There is also scope for co-operation outside the retail sector, with this year’s conference of the Scottish Agricultural Organisation Society seeing farm co-ops explore ways to develop better product routes into supermarket stores.
“What I would say,” said Scott, “is that at Scotmid we have a close relationship with our local suppliers and they supported us greatly through last year’s supply chain disruption. It’s something we’ve been doing of a number of years, add we’re keen to build on it … doing things locally has its benefits.”
She highlighted the Scottish Favourites competition, run by Scotmid to offer a platform to local suppliers, with six new businesses coming on board this year.
As for the future, Scott said the society has “lots to look forward to in the year ahead – store upgrades, and we’re continuing to invest.”
This includes targeted investment in the property business to obtain a good return, and investigating the possibility of further expansion through acquisitions along the lines of the 2024 purchase of Fosters Funeral Directors.
Scotmid is also preparing a member app, and is currently at the shortlisting stage of software providers. “It’s a good way to work with members, using digital platform,” said Scott. “It will bring lots of opportunities.”
