The Edinburgh-based co-operative has reported a pre-tax loss of £2m, after exceptional items and financing costs, for the six months to July 26.
John Brodie, chief executive, said that financial savings had to be made in order to compete.
Most of the 170 job losses, including 40 head office and field-based roles, will come through redundancies and the closure of the food stores in Brandon Place, Motherwell, and Ellon, near Aberdeen. The new senior management team is developing a recovery strategy as Scotmid struggles to integrate 50 Morning, Noon and Night c-stores acquired last year. M&S Toiletries, the distributor acquired two years ago, is also having a negative impact.
Brodie said: “It is never the easiest task in having to close any store or make people redundant. However, for the overall good of the society, this is something we have to tackle.
“Ensuring that Scotmid gets back on track is something that cannot be done overnight and what we are doing now lays the foundation for improvement.”