Sales slump hits convenience store owner
Shares in McColl's tumbled more than 6% after the convenience store operator reported a drop in sales after being knocked by the collapse of wholesaler Palmer & Harvey.
Total like-for-like sales for the 11 weeks to February 11 slipped 2.2%, having been "held back" by sales in stores that were formerly supplied by the wholesaler and together recorded a 3.6% drop in revenues.
Last year, the company took on five stores here from Co-op as part of a deal for 300 in the UK.
But in November, Henderson Group, which owns Spar, announced its intention to purchase the five food retail stores from McColl's.
In a trading update yesterday, the company said: "Having experienced some availability issues towards the end of full year 2017 in our c.700 newsagents and smaller convenience stores supplied by Palmer & Harvey, their entry into administration on November 28, 2017 has led to further disruption during the early part of full-year 2018."
McColl's said it had put contingency plans in place which included entering into a new short-term supply contract with Nisa in December, and starting its supply partnership with Morrisons earlier than planned in order to stock those 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," it said.
The share price of McColl's tumbled more than 6.4% or 16p to 233p in trading. Full-year results showed the company benefiting from the acquisition of 298 stores from the Co-op last year.