McColl’s reports widening losses

McColl's store

McColl’s has posted a statutory pre-tax loss of £5.9m in the six months to 30 May, up from a loss of £1.3m a year earlier.

The retailer also said its revenue was down, falling by 5.3% to £572.7m in the six-month period, reflecting store closures.

In addition, McColl’s reported a gross margin of 23.5%, down from 24.9% a year earlier, reflecting changing product mix due to different shopping behaviours during the pandemic, with lower sales of higher-margin impulse products.

The retailer said its Morrisons Daily roll-out programme is running ahead of expectations – 25 new Morrisons Daily conversions were made during the period – 56 stores are currently in operation. McColl’s said it is on track to complete 100 conversions by end of fiscal year 2021.

The group has separately raised £30m from a capital raising scheme to accelerate its growth strategy, which it will use to increase the number and accelerate the pace of rollout of Morrisons Daily stores from 56 to 350 by the end of the financial year ending November 2022. It will also use the funds to improve the grocery infrastructure in the Morrisons Daily sites by enhancing the standard of the refit and expanding the chilled offer.

Jonathan Miller, Chief Executive, said: “Many of the changes in consumer behaviour we have seen since the onset of the pandemic have continued in 2021, with customers spending less on impulse goods, but buying more take-home and multipack products, impacting overall margins. Alongside the impact that the industry-wide shortage of delivery drivers has had on our product availability, we are confident that these temporary trading effects will reverse as restrictions ease and distribution returns to normal.”

He added: “Looking ahead, whilst the wider economic outlook remains uncertain, we have clear demand for our grocery-led convenience offer, and our focus in the second half will firmly be on the continued roll-out of the Morrisons Daily stores, to help drive sustainable, profitable growth over the medium term.”