British convenience retailer McColl's has forecast lower annual profit, as a shortage of lorry drivers and insufficient supply of key products intensified in the fourth quarter and hit revenue, sending its shares down 33%.
McColl's said it is working with its wholesale partner, Morrisons, to restore product availability, but have been unable to entirely mitigate the impact of supply chain issues to stores, leading to significantly lower-than-anticipated revenue.
Retailers globally are grappling with tighter labour markets and stagnant supply chains as economies reopen from pandemic curbs, while Britain is also coping with a shortage of workers from the European Union due to Brexit.
Supply Chain Issues
"It is disappointing to see supply chain issues worsen through the second half, but external factors have not eased, and continue to impact much of the UK economy," chief executive Jonathan Miller said.
""Despite these supply chain issues, I am delighted by the step change we are witnessing in store performance from our Morrisons Daily conversions. This new format is showing strong sales growth and is delivering better ROI than we expected.
"Our conversion programme is moving at pace, ahead of time and on budget, and we anticipate reaching 350 Morrisons Daily stores well in advance of our original target."
McColl's, which has a network of 1,265 convenience stores and news agents across England, Scotland and Wales, now expects to deliver a core profit between £20 million and £22 million for the 12 months through to November 28.
Last year, the company reported a core profit of £29.1 million, as well as recording a 'resilient' performance in its first half.