Scotmid Co-operative Society has reported an 8% drop in full-year operating profits.

Sales rose 0.3% to £428m in the year to 26 January.

The society said the results were “positive” in an “extremely challenging market”, and had been boosted by a good performance in the second half of the year and strong trading over Christmas.

“It is also encouraging to report that both Food Retail and Semichem delivered an improved bottom line despite the extremely competitive marketplace, pressure on the high street and customers becoming more selective on where and on what they spend,” said CEO John Brodie.

“Looking forward, we anticipate that 2013 will be another challenging year, with the expectation that the marketplace will at best remain static for a number of years. The current market does, however, present opportunities and Scotmid will continue to focus on new initiatives and business development as part of the long-term strategy for growth and continuous improvement.”