Semichem distribution deployed to tackle Scotmid supply issues

Profits held steady at Scotmid during the six months to July 31 as the group used warehousing and distribution from its Semichem business to ease the strain of supply chain disruption to its 200 community convenience stores.

Although the top-line financial figures were stable, group chief executive John Brodie said these disguised changes in consumer behaviour as the pandemic has progressed.

Whereas convenience store shoppers called less frequently but spent more per visit in the early part of the pandemic, there has been a partial reversion to pre-Covid patterns of more frequent, smaller shops. More recently, as the hospitality sector has returned to normal trading hours, there has been a fall in sales of beers, wines and spirits.

And while its 17 funeral outlets carried out fewer services than in the same period last year, the easing of lockdown restrictions allowed larger and higher-value ceremonies to be carried out. Meanwhile, Semichem stores are seeing a gradual improvement as more shoppers return to the high streets, though footfall is still significantly below pre-pandemic levels.

READ MORE: Semichem stores axed by Scots co-op as Covid hammers trade

The group, which has 70 Semichem stores following the closure 17 outlets earlier this year, has been using the health and beauty chain’s dedicated warehousing and distribution facilities to supplement services from the national Co-op supply chain. This, combined with what Mr Brodie described as Scotmid’s “excellent” relationship with local suppliers, has helped alleviate the impact of widespread disruption throughout the UK logistics network.

“It is mitigating some of the challenges that national supply chains are experiencing, but we have to be realistic that this is an issue that goes beyond Scotmid and the Co-op,” he said.

The group also has a property division whose investments range from flats and shops to office blocks and other larger commercial properties. Mr Brodie said this business is now coming out of the worst stages of the crisis, with “positive signs going forward” in both the commercial and residential sectors.

Group turnover in the first half of the year amounted to £205.2 million, up from £197.1m a year earlier. Trading profit was flat at just shy of £3.1m, with the surplus before taxation also steady at £1.5m.

READ MORE: Profits rise at Scotmid as shoppers stay local but business must remain flexible

Mr Brodie paid tribute to the group’s 4,000 staff who have kept stores trading despite pressures created by the “pingdemic”, driver shortages and related disruption. He also highlighted the considerable planning uncertainty on the timing of the end of the crisis, and the likely post-pandemic impact once things return to “normal”.

Asked about the impact of rising costs, he said all retailers are working diligently to keep prices down as much as possible for consumers. As for Scotmid’s financial outlook for the full year, he said it was “probably too early” to make a call on that.

“Although our interim result demonstrates the society’s ability to adapt and respond as new trading patterns emerge, there will continue to be major challenges to face, such as rising costs, the widespread disruption of supply chains and uncertainty of the impact once all Covid trading constraints have fallen away,” Mr Brodie said.

“So, looking forward, the society will continue to be flexible, focus on matters under our control, adapt our planning accordingly and continue to focus on our core purpose of serving our communities and improving people’s everyday lives.”

Scotmid announced in April that it would close up to 22 of its Semichem stores in locations identified as unsuitable for future trading, joining the huge wave of retail casualties sparked by the pandemic. The chain was initially classed as a “non-essential retailer” in March of last year,, though that decision was later reversed.

The Herald Scotland

The Herald Scotland

The Herald is a Scottish broadsheet newspaper founded in 1783. The Herald is the longest running national newspaper in the world and is the eighth oldest daily paper in the world. The title was simplified from The Glasgow Herald in 1992