“We are seeing early signs of recovery, but we expect revenues to continue to be affected as we start the new financial year,” said boss Jonathan Miller
McColl’s Retail Group PLC (LSE:MCLS) said it expects sales to continue to be affected by product shortages for a while after revenues for the past year declined 11.2% due to supply chain disruption in the second half and the conclusion of its store optimisation programme.
The corner shop retailer said it has worked with wholesale partner Morrisons to improve availability in its stores, including a full review of product substitutions to address product shortages, which remain the major constraint.
“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.”
Like-for-like sales in the 52 weeks to 28 November fell 3.3%, but compared to two years ago were up 9.1%.
Underlying earnings (EBITDA) are expected to fall to £20mln and £22mln from £29.1mln the year before, as the company said in its profit warning last month.
During the year, 154 McColl’s shops were converted to Morrisons Daily stores, meaning a total of 185 were trading at year-end.
Having proven the capability to complete 12 conversions per week, management are now targeting an increased target of 450 stores by the end of the next financial year, up from 350, with potential to further increase stores currently being explored across all store sizes.
Chief executive Jonathan Miller the Morrisons Daily stores are “generating strong sales growth and enhanced return on investment”.
He added: “FY21 has 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.”