JW Filshill has seen profits and turnover drop as price deflation and tumbling tobacco sales hit the wholesale business.
The wholesaler, based in Glasgow, saw turnover fall 5.8% to £143m for the year ended 31 January 2016. Filshill said turnover was damaged by market-wide trends including deflation across many categories and the continued decline in tobacco.
Grocery and impulse categories continued to perform well and helped improve gross margin from 6.7% to 6.8%.
Pre-tax profits dropped from £1.4m to £900,000, but Filshill said tight cost controls across the business, growth of the KeyStore convenience brand and a good performance internationally had helped the wholesaler achieve a “satisfactory” performance in a challenging marketplace.
“Cost control continues to be a key focus for the business although wage costs have risen as we continue to support and invest in our workforce,” said JW Filshill MD Simon Hannah.
Hannah said managing the principal risk of losing customers in the competitive retail sector and forging closer relationships with key suppliers would be crucial for the following year.