McColl’s reported a jump in revenue last year as the convenience store chain benefitted from a surge in demand for local stores during the pandemic, but failed to return to profit.
Total revenue for the year was up 3.2 per cent to £1.26bn, with its store closure programme partly offsetting the surge in sales.
Like-for-like sales soared 12 per cent, driven by strong performance in alcohol, fresh food and tobacco.
Despite the increase in sales, McColl’s recorded a loss before tax of £5.3m, an improvement on its £98.6m loss in 2019.
This was partially due to changing consumer shopping habits, and also reflects additional direct Covid-19 related costs of £5.9m.
“This strong top-line performance did not carry through to profit, as changing shopping behaviours and product mix led to a dilution of operating margins, with higher-margin sales of impulse products, for example, being severely impacted,” McColl’s chairman Angus Porter said in a statement.
The company, which accepted £9.4m in government coronavirus aid, said it will continue with its store restructuring program.
It closed 179 stores last year as it moves away from low margin newsagents and towards larger, food-led convenience stores.
McColl’s chief executive Jonathan Miller said: “Looking ahead to 2021, whilst uncertainties and restrictions remain, there is no doubt that the strategic importance of neighbourhood stores has never been greater, and we are well positioned to deliver for customers and shareholders, as we continue to enhance our convenience offer.”