McColl's Posts Sales Of Over £1 Billion, Boosted By Acquisitions
UK convenience retailer McColl's has posted sales of £1.13 billion in 2017, up by 19.1% compared to the previous year, following the 'successful integration' of nearly 300 newly-acquired stores.
Total like-for-like sales were up by 0.1%, with growth in key grocery categories, according to the retailer.
Gross margin was up by 60 basis points to 25.7%, reflecting a higher mix of convenience stores and an improved product mix, and profit before tax increased from £17.7 million to £18.4 million.
McColl's noted that performance was significantly boosted by the integration of 298 new stores, which the group agreed to acquire from the Co-op in 2016. The store transformations were completed last July.
"We have delivered a strong financial performance with a step-up in sales and profitability propelled by our acquisitions," said Jonathan Miller, chief executive of McColl's.
"By surpassing £1 billion in annual revenues for the first time we have demonstrated that this is now a business of real scale," he added.
"Our convenience-led strategy continues to bear fruit, reflected by a sustained improvement in gross margin as we strengthened our product mix and the proportion of convenience stores has grown to 80% of our estate."
McColl's said that its business experienced some availability issues towards the end of 2017, following the collapse of wholesale supply company Palmer & Harvey.
However, the group has now established contingency arrangements, entering into a new short-term supply contract with Nisa for the approximately 700 affected stores.
The retailer also began its new supply partnership with Morrisons earlier than had been planned, to ensure continued supply to its stores during this period.
Miller said that 2018 will be "another busy year" for McColl's, and that he remains "confident and excited" about the future of the business.
"We will also further invest and improve the quality of our estate," he added.
In January, the group launched a new Safeway range of around 400 products to 102 stores, as part of a phased rollout.
This year, McColl's also says that it plans to complete a further 100 convenience store refurbishments, and acquire around 20 new stores.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.