McColl’s full year profit impacted by supply chain issues
The McColl’s convenience chain has seen its full year pre-tax profit decline to £7.9 million from £18.4 million in the previous year after trading was impacted by supply chain disruption following the collapse of Palmer & Harvey.
In the 12 months to 25 November 2018, like-for-like sales fell by 1.4%. However, the retailer’s performance improved during the year with like-for-likes broadly flat in its fourth quarter.
Total revenue was up 8.1% to £1.24 billion in the period after trade was boosted by the 2017 acquisition of 298 Co-op stores. This added around 30% to total sales.
Jonathan Miller, McColl’s chief executive, said: “2018 was undoubtedly a challenging year, marked by supply chain disruption following Palmer & Harvey’s entry into administration and the accelerated transition to our new supply partner Morrisons.
“Despite this disruption, we continued to make progress against a number of our key strategic plans. We completed the rollout of 1,300 stores to Morrisons supply in less than nine months, which represents a considerable achievement and provides us with a more secure supply chain and a higher quality chilled and fresh offer. We also continued to invest in our estate, with 59 convenience store refreshes completed in the year and 11 new stores acquired.”
McColl’s said it had continued to make progress with its strategy of increasing grocery and alcohol sales. The category now represents 34% of total sales. It also reported that trading in the new financial year has started well, with like-for-like sales for the 11 weeks to 10 February up 1.2%. Total sales edged up 0.4%.
McColl’s expects to acquire a “small number” of new convenience stores in the current financial year and is looking to refurbish a further 20 to 30 convenience stores as part of its ongoing store refresh programme.
Looking ahead, Miller said: “We are a profitable and cash generative business, and our priority for the year ahead is to rebuild operational momentum and we remain confident in delivering our strategic plans.”
