A strong performance from its Morrisons Daily format helped drive a 12% rise in like-for-like sales for McColl’s in 2020.
The increase, reported as part of the convenience chain’s trading update for the year ended 29 November, is a significant improvement on 2019’s flat (0%) figure. It was further buoyed by BWS, fresh food and tobacco sales.
With the entire convenience sector resurgent during the pandemic, McColl’s saw a 2.3% rise in revenues to £1.25bn. This was partly offset by 179 store closures during the year as the business shifts its focus to the aforementioned larger, more profitable Morrisons Daily stores.
Earnings before tax is expected to be between £29m and £30m, a drop from £32.1m in 2019. McColl’s put this down to margin pressures. Changes in shopping behaviour during the pandemic led to an altered product mix, which squeezed margins. Decreased services revenues and ongoing Covid-related costs also hit profits.
To simplify its operations and keep costs down, the business expects to have all its stores supplied by Morrisons by March 2021.
Jonathan Miller, Chief Executive, said: “Despite the challenges of 2020, the pandemic has reinforced our confidence in our ongoing strategic change programme. The importance of neighbourhood stores has never been greater, and we are well positioned to continue enhancing our convenience offer by further developing our partnership with Morrisons, and further improving the quality of our estate and our overall customer experience.”
