McColl’s sales fall after Palmer & Harvey collapse

Brentwood, Essex, UK: Convenience store and newsagent operator McColl’s has confirmed that it had experienced some “availability issues” towards the end of its financial year 2017 and further disruption into the early part of 2018 following the collapse of wholesaler Palmer & Harvey.

Chief executive Jonathan Miller, announcing the company’s preliminary results for the 52 weeks ending 26 November 2016, said: “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.

“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 (LFL) sales for the 11 week period ended 11 February 2018 were down 2.2%, held back by sales in our stores formerly supplied by P&H where LFL sales were down 3.6%. However, total sales continued to perform strongly, up 26.7%.

Total revenue was up 19.1% to £1.13bn (2016: £950.4m) following the successful integration of 298 convenience stores (completed in mid-July 2017).

The company also pointed out that it had made “good progress” towards its strategic target of increasing grocery and alcohol sales which were up over 40% and now represents 32% of total sales (2016: 27%)