McColl’s Group has blamed November’s failure of Palmer & Harvey for a 2.7% drop in like-for-like sales, as revealed in its H1 interim results (26 weeks to May 27, 2018).
Boss Jonathan Miller said the period was one of the most challenging the business had ever faced, and that the supply chain disruption caused by P&H’s collapse was “unprecedented”.
As a result, a new supply partnership with Morrisons covering 1,300 stores (agreed in August 2017) was accelerated and is expected to be completed in August, ahead of schedule.
As the Group emerges from its logistical nightmare, and helped by the good weather, sales figures are beginning to improve, with like-for-likes for the first seven weeks of H2 down 0.8%.
Total H1 revenue was up 19.2% to £601.7m (2017: £504.8m) driven by the successful 2017 acquisition of around 300 c-stores from the Co-op.
Profit before tax was £2.3m (2017: £4.5m), following £3.5m of downward adjusting items (2017: £2.3m) and £2.4m of property profits (2017: £0.0m).
The revival of the Safeway brand, covering around 400 lines, has seen an approximate 5% rise in own-label participation year-on-year in stores supplied by Morrisons.
Jonathan Miller, McColl’s Chief Executive, commented: “We have relaunched the Safeway brand at McColl’s, providing our customers with a more competitive and higher quality food offer. We will therefore have a progressively stronger and simpler operational position with a more compelling offer as we move through the second half and into 2019.
“We will also continue to improve the quality of our estate, through more store refreshes and acquisitions, and to invest in our customer proposition in what remains a competitive environment. As the convenience sector continues to grow, we remain confident that our clear strategy will allow us to make further progress and deliver sustainable returns for shareholders.”
