Historic Scottish retailer and wholesaler rings up fifth year of profit growth as shoppers stay local

Newly released accounts for the year to the end of April reveal that pre-tax profits rose 10.3 per cent to £3.7 million while net turnover was up 4.2 per cent at £221.3m, following a dip in sales the previous year. It marks a fifth year of growth in underlying profits since the development of the group’s “five-pillar, customer facing business strategy”.

Chief executive Colin McLean said the results had been delivered in a year of “continual change”, a challenging economic climate and record double-digit food inflation. “What we have demonstrated is that we can be very agile,” he said. “As a family business in Scotland, we can be much closer to the market in terms of understanding some of the challenges. We do think the second half will get tighter but we are doing a lot to help our customers and our colleagues.

“We can understand our local customer needs better and respond quickly to the ever-changing market trends than most other UK managed convenience operators. With record levels of financial investment signed off once again, together with our latest ScotFresh store acquisition, our Spar Scotland momentum continues to gather pace and our business is off to a very strong start in the new financial year.”

He said the business was now in a better shape to contemplate undertaking acquisitions, either in retail or in wholesale. The family-owned company, which was founded in 1919, trades as Spar Scotland and distributes to more than 300 Spar-branded stores across the country. It owns and operates 112 of its own stores. The firm works with more than 150 local suppliers across Scotland and around half of everything it supplies is Scottish sourced or produced.

McLean said that while the relaxation of Covid restrictions had seen a return to some pre-pandemic shopping behaviours, the habits of shopping locally had been retained by a “noticeable proportion” of consumers. The team at CJ Lang has continued to collaborate closely with hundreds of independent retailers, he noted, enabling the expansion of the Spar store estate. At the same time, a key initiative has been about addressing the consistency of customer brand standards across the entire branch network.

“We continue to grow our independent customer base and make improvements to our offer to meet the changing customer needs within convenience retailing,” McLean said. “We are now attracting the very best of Scottish retailers to join Spar Scotland thanks to our competitive wholesale delivered package and own label range, while sharing the very best of our learnings from our company store investment programme.

“We are focusing on quality rather than quantity, ensuring that retailers with our Spar name above the door adhere to our standards with appropriate remedial action being taken on those who fail to maintain them. With our vision of developing a solid business, not just for today but for tomorrow, we have grown our independent sales and are excited to welcome on board more forward-thinking, quality Scottish retailers in the future.”

Responding to reports of increased theft from stores across the retail sector as the cost-of-living crisis bites, as well as verbal and physical abuse directed towards those on the frontline, MacLean admitted that the business had seen an increase in some areas.

He said: “As a convenience retailer we see it more than most and have certainly seen an upturn in certain areas. The Scottish Government have been ahead of the game in terms of looking after shop workers but it is requiring us to think differently, investing in CCTV systems and guards in the right places, for example. We are working with the police to help address anti-social behaviour in some areas. It’s still crime and affects jobs at the end of the day and if shrinkage becomes too much of an issue it will impact the bottom line.”

Significant investment across the Spar company store estate over the past year has resulted in acquisitions in Troon and Castletown near Thurso. The company store development programme, including an award-winning store at Crosshouse, Kilmarnock, together with a number of other sites where new energy saving refrigeration, digital lighting and electronic shelf edge labels, have been progressively rolled out. A new “CJ’s” food to go offer was recently launched in Garthamlock, Glasgow, with a variety of baguettes, chicken chunks and other lunch options.

The newly acquired ScotFresh stores will retain their existing branding and will be operated as a separate business unit initially, while being fully serviced and supported by CJ Lang’s central support teams and its major distribution centre in Dundee.

McLean said a recent Spar Scotland trade show in Aviemore had attracted a record number of attendees, communicating with key suppliers and customers. The business has also scooped a number of awards over the past six months, including “symbol” group of the year at both the Scottish Wholesale awards and Scottish Local Retailer awards. Spar Scotland recently announced an exclusive brand franchise agreement for Scotland that has been secured with Northern Irish coffee to go brand Barista Bar, spanning all Spar convenience and petrol forecourt outlets.