Essex-based Chelmsford Star Co-op has reported a trading loss of £746,000 for the year to 25 January, down from a £522,000 surplus the previous year, as inflation and cost-of-living pressures continue to impact trade.
Turnover was £78.7m, down from £83.3m, and net assets stand at £12.4m, down from £14.2m.
In the directors’ report to members, the board said: “The retail landscape continues to evolve postpandemic for a further consecutive year.
“The year has presented challenges, with the continuing cost of living crisis affecting us all, ongoing conflicts across the world affecting energy and commodity prices as well as general economic conditions continuing to worsen.
“Your society continues to be impacted by the increases seen in inflation and interest rates and the knock-on effect this has had on our members and customers.
“Despite a difficult and disappointing period of performance, your board of directors and executive team are confident that with continued diligence, financial controls and the implementation of various opportunities, your society shall return to a stronger financial performance within the short term.“
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The results were also impacted by a number of store closures, the report added, along with continued pressure from operating costs, which “totalled £25,010k highlighting a slight decrease across the board compared to the £25,151k reported in the previous financial year, again partly caused by the number of store disposals within the year.
“Despite the reported decrease, operating costs have overall significantly increased since the 2022/23 year by over £1,300k. Energy costs totalled £1,539k, a decrease of £465k year on year. Distribution costs totalled £3,125k, also a decrease by £218k year on year.”
The society’s food retail business business recorded a trading profit of £935,000, says the report, despite the cost-of-living crisis which helped cut gross takings excluding fuel, bill payments, and lottery services by 5.77% to £69.3m.
The society said it had taken “difficult decisions regarding store closures, which included stores at South Ockendon, Broomfield and our historic Duke Street site,” adding: “These stores were closed due to continued poor financial performance which posed a risk to the society’s finances. Whilst it is regrettable that Chelmsford Star will no longer be operating and serving our members and communities in these areas, it is important that such decisions are taken in order to guarantee the society’s long-term sustainability.”
But the society has also carried out a number of refits, including its stores at Beehive Lane, Torquay Road, Writtle, Portsea Road. It now runs 11 refitted stores, all of which trade under the International Cooperative Mark.
“The refits of the stores have introduced the new food store format with new branding and an enhanced food range,” the report says. “The new store format has generated much interest and early results continue to be positive. The board and management continue to consider options for potential refit roll outs at our stores in order to capitalise on opportunities for growth and better performance.”
The co-op is continuing to explore other services, adds the report, and is set to introduce Just Eat and Deliveroo services alongside last year’s rollout of Uber Eats deliveries.
At Chelmsford Star’s department stores, gross takings remain below pre-pandemic levels, falling 5.82% to £6,627,000. “General market conditions have substantially impacted the performance of the department stores,” says the report. “Furthermore, despite an impressive and broad variety of providers and offerings within the stores, external and uncontrollable factors such as poor weather in the summer months for example, have presented barriers to better performance.”
The society has ceased online sales from the department stores due to low volumes, and the co-op says it will continue to monitor performance and explore alternative strategies, with trading losses at the division recorded at £396,000 – or £171,000 after the release of onerous rent provision.
Travel generated a trading profit of £31,000, with gross takings up 11.22% to £5,643,000, positive customer feedback and continued online trade.
Funerals recorded a trading profit of £63,000, down from £164,000, with gross takings down 4.5% from £2119,000 to £2,024,000.
Rental income from the society’s investment portfolio – a mixture of residential properties above stores and commercial properties in Chelmsford town centre – rose to £338,000 from £353,000.
Capital investment including store refits was £586,000, and total distribution of profit – including interest on members’ share capital, dividend on purchases, membership grants, and community donations, amounted to £500,000, compared to £461,000 last year.
Membership grew by 4,530 to 102,769, of whom 27.8% are considered active.
