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.