McColl’s will roll out the Morrisons Daily convenience fascia to 100 more of its sites than it had initially planned.
The company now expects to complete 450 conversions by the end of November 2022, compared to its previous target of 350 in the same timeframe. Morrisons is increasing its contribution to the enlarged conversion programme.
McColl’s highlighted that the Morrisons Daily stores have a higher grocery mix and wider breadth of product choice, which is driving increased customer spend. This stronger revenue performance means the group is seeing a quicker payback on its investment towards the shorter end of a 2-3 year range.
When the 450 stores are open, the Morrisons Daily format will represent over a third of McColl’s total store estate and more than half of its sales.
Jonathan Miller, Chief Executive of McColl’s, commented: “These stores have a higher grocery mix and wider breadth of product choice which is great for our customers, and with strong sales growth and better return on investment, it is great for the company too. We look forward to continue working closely with Morrisons in the years ahead.”
Earlier this month, shares in McColl’s fell nearly 30% after it warned of lower annual profits due to the industry’s supply chain problems impacting product availability in its stores, with a consequential effect on revenues.
The group stated today that its lending banks remain “supportive” with discussions are ongoing that are expected to conclude by the publication of its full-year results in March 2022.
In the meantime, McColl’s has reached an agreement to defer a financial covenant test due on 28 November 2021 to 31 December 2021, and thereafter it is expected to roll on a monthly basis. “This will allow additional time for the company to work constructively with its lending banks in regard to the terms of agreement for the upcoming financial year and the balance of the facility, which matures in February 2024,” it said.
NAM Implications:
- In retail, if it works, roll it out to meet demand…
- Simples!
- As a supplier of brands that drive demand…
- …anticipate potential opportunities.
