McColl’s to develop Morrisons partnership

The group reported a 2.3% increase in sales to £1.25bn for the 53-week period ended 29 November 2020.

The retailer’s like-for-like sales for the year grew by 12%, driven by a strong performance in beers, wines and spirits, fresh food and tobacco.

McColl’s said the sales figures reflecting strong demand since the onset of the Covid-19 pandemic, partly offset by store closures, as it continues its store optimisation programme.

The retailer expects its pre-tax earnings to be around £58m.

The group, which kept all of its stores trading safely during the pandemic, says its strongest performer was its Morrisons Daily format, which saw “significant” like-for-like sales growth. McColl’s is currently considering whether to convert further sites in the first half of next year, adding to the 31 trial stores in current operation.

In addition, the retailer is currently migrating the remaining part of its estate to Morrisons supply, to simplify its operations, which is expected to complete by March 2021.

McColl’s said it decided to accelerate its store optimisation plans during the second half of the year, with 179 stores closed in 2020, in line with its strategy to increase focus on larger, more profitable, convenience stores.

Jonathan Miller, McColl’s chief executive, said: “Since the onset of the pandemic, we have seen strong demand driven by our customer offer and the positioning of our stores in key neighbourhood locations. At the same time, we have faced significant Covid-19 related costs and our operating margins have been reduced by a change in customer behaviour and product mix.

“Despite the challenges of 2020, the pandemic has reinforced our confidence in our ongoing strategic change programme. The importance of neighbourhood stores has never been greater, and we are well-positioned to continue enhancing our convenience offer by further developing our partnership with Morrisons, and further improving the quality of our estate and our overall customer experience.”