Chelmsford Star reports drop in trading surplus in tough retail environment

‘2018 has been the worst year for shops since 2008, the height of the recession, and there is no reason to think 2019 will be better’

Essex-based retail co-op Chelmsford Star has reported a trading surplus of £900,779 for the year to 26 January 2019, down from £1,098,714 the previous year.

Presenting the annual results at the society’s AGM, chief executive Barry Wood gave a bleak assessment of the state of the retail sector, telling members there were “challenges coming from every direction” including discounters forcing a reduction in margins and legislation changes increasing costs.

And he quoted the Centre of Retail Research’s recent report which said: “2018 has been the worst year for shops since 2008, the height of the recession, and there is no reason to think 2019 will be better.”

Gross takings for the year were £113,499,000, up 2.8% on the previous year’s £110,413,000, and gross profit was £24,394,000, up1.6% on the previous year’s £24,002,000. But operating costs increased  by 2.6% to £23,493,000, largely thanks to personnel costs.

There were a number of financial positives and areas of respectable growth for the society, including a 6.8% increase in like for like gross takings for their core food business, but Mr Wood admitted it may not enough to absorb the level of cost increases.

During the year, the society disposed of two loss-making stores, Meppel Avenue and Southchurch Road.

The figures were a mixed bag for Quadrant department stores, with gross takings falling 4.9% due to a decline in the furniture business and the loss of a number of major fashion brands over the year. Fortunately, this was mitigated by the success of its own-bought fashion, which grew 20%.

The society’s smallest businesses fared much better, with trading profit at the travel arm up 37.6%, and funerals up 51.11%.

Despite the difficult conditions, Chelmsford Star has continued to have a major positive impact across the county, running initiatives such as litter-picking events and supporting local groups, schools and organisations. The society also donated over £61,000 to its charity of the year, Alzheimer’s Society, after fundraising efforts from colleagues and customers. 

It added: “Chelmsford Star continues to dedicate all it can to support Essex, and has promised that 30p in every £1 spent in its stores across the year will be reinvested back into our local economy and communities in some way. That is the co-operative difference.”

The society also reported satisfaction from members, with customer service rated at 100% in their travel team, 98.5% by funeral clients and 95.3% from those using its department stores. Recent mystery shoppers rated the society’s 40 food stores with an average satisfaction level of 94%.

It also demonstrated its environmental commitments, announcing that 99.7% of all waste it produced was recycled.