McColl’s profits hit by supply chain disruption
McColl’s Retail Group has announced a sharp fall in operating profit for the 52-week period ended 25 November 2018.
The firm’s profit before tax fell by nearly 60% from £18.4m to £7.9m. Total revenue rose by 8.1% to £1.24bn.
In 2018, the retailer was hit by its former supplier Palmer & Harvey falling into administration. As a result, it lost 700 stores and had to transition quickly to new supply partner Morrisons.
McColl’s Retail Group has announced a sharp fall in operating profit for the 52-week period ended 25 November 2018.
The firm’s profit before tax fell by nearly 60% from £18.4m to £7.9m. Total revenue rose by 8.1% to £1.24bn.
In 2018, the retailer was hit by its former supplier Palmer & Harvey falling into administration. As a result, it lost 700 stores and had to transition quickly to new supply partner Morrisons.
Chief executive Jonathan Miller said: “2018 was undoubtedly a challenging year, marked by supply chain disruption.
“Despite this disruption, we continued to make progress against a number of our key strategic plans. We completed the roll out of 1,300 stores to Morrisons supply in less than nine months, which represents a considerable achievement and provides us with a more secure supply chain and a higher quality chilled and fresh offer. We also continued to invest in our estate, with 59 convenience store refreshes completed in the year and 11 new stores acquired.”
Chairman Angus Porter added: “It has been a challenging year as the McColl’s team have navigated their way through unprecedented supply chain disruption.
“The business began the 2018 financial year with great confidence, having successfully integrated a major acquisition and signed a new wholesale supply agreement with Morrisons. However, just days into the new year we experienced a significant setback following the sad failure of Palmer & Harvey. The loss of supply to 700 stores created major disruption and required us to put in place an interim supply solution for nine months, during which we accelerated the transition of 1,300 stores to Morrisons supply.”
Porter also said that moving over to a new supplier “at a much faster pace than anticipated” disrupted the retailer’s plans for a Safeway range roll out from Morrisons.
McColl’s has around 1,550 managed convenience stores and newsagents. It operates across the UK, except in Scotland where it operates under a heritage brand, RS McColl. It is also the largest operator of post offices in the UK, with around 600 in-store counters and branches.
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