Costcutter profits break £10m
CONVENIENCE store franchise Costcutter has seen profits rise to £10.6m despite the impact of the recession on consumers and retailers.
Sales rose by 7.4% to £609.5m, outperforming the convenience store sector average of 6.3% and contributing to a growth in profits of more than 11%.
However, the York-based company blamed the economic climate and a tightening credit picture for a net loss of five stores to 1,536 for the year to the end of April.
The convenience store sector is becoming increasingly crowded with Waitrose and Morrisons joining the other major supermarkets in offering smaller store formats.
Costcutter managing director Nick Ivel said: “Our results reflect the support we have given to our retailers over the past year.
“We have worked closely with them through the difficult recession, taking measures such as providing free themed point of sale leaflets for retailers to generate maximum impact in-store and to increase basket spend.
“Helping our retailers to future-proof their businesses through store development has helped ensure Costcutter retailers are trading to the best of their potential and offer the right range and shopping environment to compete with the multiples.”
Despite a difficult start to the current trading year the company is predicting the period will produce “substantial growth” and is looking to add further stores to its retail division.
As last year, the directors have not recommended a dividend should be paid with the overall profit of £7.7m transferred to reserves.
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