Sales Up At McColl’s But Co-op Acquisition Dents Profits

McColl’s Retail has hailed its sixth consecutive year of sales growth, although its recent acquisition of 298 Co-op stores hit profits.

For the year ended 27 November 2016, the convenience and newsagent store retailer saw its total revenue grow 1.9% to £950.4m, although like-for-like (LFL) sales fell 1.9%.

LFL sales in its premium convenience and food and wine stores were down 1%, whilst LFL sales in newsagents and standard convenience stores slipped 3.3%. However, LFL sales in recently acquired and converted stores grew by 0.8%.

Pre-tax profits were down 16.1% to £17.7m, impacted by exceptional costs of £3.1m related partly to its Co-op purchase. It added that the integration of the Co-op stores during 2017 was “on track” with the first converted outlet opened in Canvey Island on 31 January and over 20 stores are now trading as McColl’s.

At the year-end, McColl’s had a total of 1,001 convenience stores having acquired 58 new outlets.

The group added that 59 food and wine conversions (formerly newsagents) were completed in year, whilst “excellent progress” was made with its food-to-go offering (over 30 new units rolled out and double-digit LFL growth). McColl’s also introduced a further 12 Subway franchises to its estate and said its pilot convenience store refresh project was seeing encouraging early performance.

Jonathan Miller, Chief Executive, commented: “2016 has been a pivotal year for McColl’s during which we were firmly established as a leading convenience retailer, delivered good financial performance in line with expectations and laid the foundations to deliver significant growth in the years ahead. With new appointments to our management team and a refreshed strategy in place, we are ready to begin the next stage of our journey to become your neighbourhood’s favourite shop.”

He added: “2017 promises to be an exciting year for McColl’s. We remain very confident about achieving further progress against our strategy.”

Meanwhile, in the first quarter of its new financial year, McColl’s revealed that total LFL sales were down by 1.3%, representing a fourth consecutive quarter of improvement. Total revenue for the quarter was up 2.1%.

The group added that the outcome of the EU referendum last June had created some uncertainty for the sector and the economy as a whole. However, it said that it was committed to working proactively with its suppliers to ensure that it can remain competitive.