Scotmid Co-operative has announced trading profits of £2m in its half year trading results amid what it describes as a challenging Scottish retail market.

The trading results for the 26-week-period ending July 30 are in line with the same period last year, while turnover for the period was up £4m to £185m.

The group’s steady results come despite a challenging backdrop in Scotland; the Scottish Retail Consortium reported an average 1.6% reduction in like-for-like sales for the same six-month period for Scotland’s retail landscape as a whole.

John Brodie, chief executive of Scotmid, said: “Against this background and that of a declining Scottish market our retail trading businesses delivered good performances. Our food convenience business performed well, with turnover growth driven by differentiation initiatives such as bakery and food-to-go helping to offset the market decline.

“Our Semichem stores found it more difficult to counter market factors but still delivered a positive sales performance ahead of the market.

“At the year-end we highlighted the specific challenge of the national living wage in the context of an unfavourable market. The society has delivered a positive initial response to this challenge by accelerating continuous improvement initiatives while maintaining focus on the development of our core business to deliver a solid first half result.”

The group says that the last six months have “magnified general market uncertainties” and predicts the second half of the year to be “equally more challenging” following the result of the Brexit referendum.

“These challenges will also continue into 2017 when we face further cost increases including the apprenticeship levy. The economy and in particular the unfavourable retail landscape will be a significant ongoing challenge for the society which we will continue to address with our continuous improvement philosophy,” added Brodie.