Friday 23rd Aug 2019 - Logistics Manager Magazine

Strong growth for McColl’s

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McColl’s, the convenience store group, increased sales and profits by some 20 per cent last year, despite disruption resulting from the closure of Palmer & Harvey.

Chief executive Jonathan Miller said: “We have delivered a strong financial performance with a step-up in sales and profitability propelled by our acquisition of 298 convenience stores, and by surpassing £1bn in annual revenues for the first time we have demonstrated that this is now a business of real scale.”

“Our convenience-led strategy continues to bear fruit, reflected by a sustained improvement in gross margin as we strengthened our product mix and the proportion of convenience stores has grown to 80 per cent of our estate.

“Continuing this momentum, this year we will significantly enhance our customer offer as we transition supply in over 1,300 stores to Morrisons and exclusively launch hundreds of new Safeway branded products at McColl’s.”

The retailer said it had experienced some availability issues towards the end of 2017 in some 700 newsagents and smaller convenience stores supplied by Palmer & Harvey, and there had been further disruption during the early part of 2018.

“We have put in place contingency arrangements, entering into a new short-term supply contract with Nisa on 4 December 2017 for the affected stores. We also began our new supply partnership with Morrisons (agreed in August 2017) earlier than previously scheduled to supply these same stores with tobacco.

“While these contingency agreements have largely ensured continuity of supply, we continue to closely manage distribution to these stores and the disruption has impacted our sales performance. Total LFL sales for the 11 week period ended 11 February 2018 were down 2.2 per cent, held back by sales in our stores formerly supplied by P&H where LFL sales were down 3.6 per cent. However, total sales continued to perform strongly, up 26.7 per cent.”

And the retailer highlighted the fact that 2018 would be a strategically important year for McColl’s as it moved to new supply arrangements, and continue to grow and improve the quality of our estate.

Group revenue was up 19.1 per cent in 2017 to £1.13 billion, while EBITDA rose by 20 per cent to £44m.