Scotmid has announced a 1.2% increase in annual turnover to £436m amid a “challenging marketplace”.

Scotland’s largest independent co-operative generated operating profit of £5.5m for the year ending 31 January 2015, up £1m from the previous year.

However, chief executive John Brodie remained cautious in light of low consumer confidence and a decline in retail sales in Scotland over the 12-month period.

“These are a solid set of figures, helping to deliver a like-for-like sales performance which has been consistently ahead of the market,” he said.

“Throughout the year we have continued to take tough decisions and continued our programme of differentiation to help ensure sustainable profitability and growth going forward. The retail landscape continues to change rapidly as highlighted by announcements from all the major multiples to change strategies including decisions on store closures and future direction.”

He said the past 12 months had seen the group progress its Food vision, which had helped differentiate it from the competition with a focus on concept bakery, local products and the introduction of a number of key value lines.

“Although this is a positive set of results it continues to be a challenging marketplace which requires us to innovate, work hard and, where necessary, take tough decisions. While remaining cautious and measured in our approach, the Society will continue to drive new initiatives and look for other potential areas for growth,” he added.

Scotmid’s Stockbridge store in Edinburgh was named Convenience Retailer of the Year at CRA 2015 in March, while its Moredun store in Edinburgh scooped the Energy Efficient Store of the Year.