Operating profit at Scotmid Co-operative was down slightly in the 26 weeks ended July 27, 2013 in the face of what was described as a “challenging retail trading environment linked to an ongoing squeeze on household incomes”.

Results for the first half of the year delivered an operating profit of £2m for the society, down £0.1m on the same period last year. Turnover was down £1m at £210m.

The Society has continued to make progress on store segmentation initiatives, including the rollout of the group’s premium fresh format to 10 sites and the trial of a value format in Prestonpans. Specialist bakery counters have been rolled out to 40 stores in partnership with six leading local bakeries.

Chief executive John Brodie commented: “The good summer weather gave a strong boost to our retail trading businesses in late June and July, helping to catch up with the adverse effect of the prolonged cold weather in winter and spring, which impacted on our early retail sales performance.

“Although there have been some reports of economic recovery, this appears to be specific to certain locations and sectors and is not evident in the retail and consumer sectors in Scotland, Northern Ireland and Northern England.

“There will normally be a significant time lag before any recovery filters down to consumers, so the outlook for the second half of 2013 remains challenging. We continue to sound a note of caution as the erosion of real terms disposable income is the everyday reality for our customers.”