Chelmsford Star Co-op has announced its results for 53 weeks to 39 January, with a trading profit of £1.9m offset by £4.8m in exceptional costs from its department store businesses.
The Essex-based retailer said its gross profit was up 0.8% to £24.7m, with the growth in food business during the pandemic outweighing loss in gross profit at its travel business and department stores.
But in her note to members, secretary and head of management services Ellen Tredwin said the year brought exceptional costs of £4.8m with further losses predicted at the Quadrant department store in Braintree.
“A further provision of £821k for the future rent obligation to the lease end of March 2026 has been provided as an onerous lease,” she wrote. “This
assumes that the rent review due in March 2021 does not result in an increased rent. In future years, until the end of the lease, the society will benefit from a credit to exceptional income equivalent to the annual rent costs of Braintree Quadrant.”
The exceptional costs figure also includes £3.97m for the impairment of the carrying value of the freehold property of Chelmsford Quadrant.
“Considering the above,” added Ms Tredwin, “and after meeting the costs of all distributions, your society posted a retained loss of £3,546k, this compares to a retained loss of £617k last year.
“Whilst the business plan anticipated a retained loss in the year, the level is greater than envisaged in the plan for the exceptional reasons outlined above.”
She said the co-op runs “a lean operation” but saw operating costs grow 1.4% to £24m, which includes the extra costs of pandemic measures.
Trading profit before government assistance and before depreciation was £2.4m, a year on year decrease of £170,000. Trading profit after taking into
account retail grants and furlough payments was £1.9m, up £1.17m on the year before.
Looking to the impact of Covid-19, she said two trading divisions – travel and department stores – closed for 40% of the year. The first lockdown also saw panic buying in food stores but the funeral teams had to adapt to restrictions in services.
“When lockdown restrictions eased in mid-June, social distancing restrictions remained, and customers particularly for the Department Store and Travel businesses remained extremely cautious,” said Ms Tredwin.
Like for like food sales rose by £6m – 7% – and investment continues, with three stores refurbished, self service checkouts installed at three other stores, and spending on energy efficiency and a trial of bodycams to protect staff from the national increase in retail crime.
The co-op also began a trial of home deliveries in partnership with Snappy Shopper, with a possible rollout later this year.
The Society’s Charity of the Year partnership came to an end with Essex & Herts Air Ambulance, having raised £35,000. This year, the Board unanimously to support the Essex Community Foundation’s Covid Response & Recovery Programme.
Its Community Card scheme now supports 349 local groups. During the year, 74 of these groups withdrew funds raised by their supporters to the value of £4,267.
Ms Tredwell added: “This year has been like no other, with the
pandemic having a mixed impact on the society’s trading businesses.
“Fortunately, the diverse nature of the society’s trading divisions has to an extent helped it weather the storm. The society has taken a significant level of exceptional costs this year, which will assist the society longer term.
“Your Board remains confident in the management team in delivering these strategies.”
