McColl's on to recovery from shortages crisis but issue remains 'major constraint'

Convenience store chain McColl’s has said it is seeing signs of a recovery from supply chain disruption, but warned over an ongoing hit to sales saying product shortages still remain a “major constraint” on trading.

Delivering the update on a "tough year" of trading due to Covid-19 restrictions and supply chain challenges, McColl's revealed that the disruption took its toll on annual sales, as they fell 11 per cent to £1.11bn for the year to 28 November.

“Working with our wholesale partner Morrisons, we have taken steps to improve availability in our stores,” said the group which has 1,1965 stores across the country.

“With these measures we are seeing early signs of recovery, but we expect revenues to continue to be affected as we start the new financial year.”

Although businesses across the globe are grappling with supply shortages as economies reopen after pandemic curbs, Britain is also coping with a lack of workers in key roles such as HGV driving and food processing.

Jonathan Miller, chief executive of McColl’s, said it had “undoubtedly been a tough year for the business, starting with the impact of Covid-19 restrictions and ending with the widely reported and ongoing supply chain challenges”.

“Although we have been able to partly mitigate these external factors, they have still had a significant impact on underlying trading,” he said.

Despite the challenges, McColl's said it had made significant strategic progress with its Morrisons Daily roll-out.

A total of 185 Morrisons Daily stores are trading at year-end, ahead of schedule, with 154 conversions completed during the financial year. An increased target of Morrisons Daily conversions from 350 to 450 stores is in place for the end of the next financial year, with the potential to further increase stores being explored across all store sizes.