Wholesaler JW Filshill increased its pre-tax profits by 62.5% to £1.3m despite a 4.4% fall in sales.

The jump in profits was largely down to improving efficiencies and investing in technology which resulted in a reduction of its operating costs of £400,000 in the year to 31 January.

The Glasgow-based operator, which also owns the KeyStore convenience brand said the fall in sales to £151m was down to strong competition from larger supermarkets and discounters.

“The good news is that independent retailers are experiencing a resurgence in popularity with consumers who are increasingly turned off by the major retail multiples,” said JW Filshill MD Simon Hannah.

“However, we have the more recent competition from the discount retailers – Lidl and Aldi – which are striking a chord with consumers who previously haven’t considered shopping there. That’s why we’re investing more heavily in technology and social media, and trying to be smarter when it comes to marketing in order to engage with shoppers who are increasingly using mobile technology in their everyday lives.”

However Hannah predicted a turnaround in sales over the next few years.

“We believe the decline of sales in recent years will reverse and grow will return within the following three years due to population growth and a change in consumer spending habits migrating towards the convenience sector.” he explained.

Last August, JW Filshill also launched an export subsidiary named The Craft Beer Clan of Scotland trading brands including Glasgow-based West Brewery and whisky oak aged Tennent’s Caledonian to China and Hong Kong.

“Interest in our export sales and consolidation model is increasing with more Scottish producers looking for us to take their products to international markets as part of a wider Scottish portfolio.” said Hannah.