RETAIL group McColl’s is accelerating its growth plans after seeing like-for-like sales drop by 2.2 per cent as its newsagent estate contends with price deflation and a lower demand for tobacco and newspapers.
Total revenue grew by 2.2 per cent to £469m and profit before tax increased by 8.1 per cent to £8.2 million for the six months to May 29.
In Scotland, the company operates 157 stores through its McColl’s and RS McColl brands. A further 60 stores will open next year after McColl’s acquired 298 Co-op stores in a deal worth £117m.
Jonathan Miller, chief executive, said: We are confident that our position as a leading neighbourhood retailer will allow us to deliver sustainable returns for shareholders. The business is well placed to make further progress in the second half and we remain on track to achieve results in line with the board’s expectations for the financial year.”
Over the period it acquired 24 new convenience stores, taking its estate to 933 convenience stores and 433 newsagents – a 30 per cent increase in convenience stores since its initial public offering in 2014.
The deal with the Co-op has kept McColl’s on target to achieve 1,000 convenience stores by the end of 2016. The transition of those stores is expected to begin in early 2017 in what Mr Miller called a “pivotal moment for the business that allows us to accelerate our growth ambitions and considerably increase our neighbourhood presence.”
The company said its like for like sales had been impacted by continued pressure on mature categories and price deflation, along with poor weather in March and April, which particularly suppressed impulse category sales.
Like for like sales in its premium convenience and food and wine stores were down by 1.5 per cent for the year to date, whereas within newsagent and standard convenience stores LFL sales were down by 3.7 per cent.
The company said this illustrated the importance of converting stores to its newer formats and adding premium convenience stores to the estate through acquisition. To highlight this, like for like sales in stores acquired or converted between 2014-2015 which have traded for over 12 months were up one per cent.
As it further attempts to transition into the growing convenience space, McColl’s grew food to go sales – a key category in that sector – by 11.4 per cent. It also signed more concession deals with sandwich franchise Subway.
The company is also rolling out Collect+ and Amazon lockers across the estate, which it said would provide local communities with an increasing range of services.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here