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McColl's grows full year sales and profit

The McColl’s newsagent and convenience chain has grown both its full year sales and profit after passing the £1 billion revenue mark for the first time.


McColl's grows full year sales and profit

The McColl’s newsagent and convenience chain has grown both its full year sales and profit after passing the £1 billion revenue mark for the first time.

In the year to 26 November, total revenue climbed by 19.1% to £1.13 billion following the successful integration of 298 former Co-op convenience stores. Pre-tax profit increased to £18.4 million from £17.7 million in the previous year.

Meanwhile, total like-for-like sales edged up by 0.1%. Like-for-like sales in recently acquired and converted stores rose by 2.4%

Jonathan Miller, McColl’s chief executive, 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 £1 billion 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% of our estate.”

Following the collapse of Palmer & Harvey, McColl’s entered into a new short-term supply contract with Nisa on 4 December to cover the stores previously supplied by the wholesaler.

It also began a new supply partnership with Morrisons earlier than previously scheduled to supply the same stores with tobacco. This followed the signing of a long-term supply agreement with Morrisons last August which is expected to replace McColl’s existing supply arrangements in time.

Giving an update on more recent trading, McColl's said: “Whilst 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 like-for-like sales for the 11-week period ended 11 February 2018 were down 2.2%, held back by sales in our stores formerly supplied by Palmer & Harvey where like-for-like sales were down 3.6%. However, total sales continued to perform strongly, up 26.7%.”

In January, McColl’s launched its new Safeway range of around 400 products in 102 stores as part of a phased rollout. The company said it was pleased with the reaction from customers.

This year McColl’s plans to complete a further 100 convenience store refurbishments as part of its store refresh programme. It is also looking to acquire around 20 new convenience stores.

The company said: “2018 is a strategically important year for McColl's as we move to new supply arrangements and continue to grow and improve the quality of our estate. It will be a period of significant transition, however the actions we are taking will support our strategic objectives and deliver sustainable growth in the years ahead.”


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