Local shop chain McColl’s said it has a contingency plan in place to avoid a supply shortage after supplier Palmer & Harvey went bust last week as it reported annual revenues of over £1billion.
McColl’s said it was in talks with suppliers to try minimising the impact of the collapse of Britain’s biggest delivery wholesaler so that its 700 newsagents and convenience stores would not face shortage of products.
‘We are in ongoing discussions with our supply chain partners, and manufacturers, with a contingency plan already in place to ensure continuity of supply to the around 700 newsagents and smaller convenience stores, previously supplied by P&H, within our estate of 1,611 stores,’ the group said.
Sales slowdown: Despite an annual increase, like-for-like sales fell in the fourth quarter
It comes as the group reported revenues of over £1billion for the first time in the year to 26 November, despite a slowdown in the fourth quarter.
McColl’s blamed unfavourable weather and ‘declining traditional categories’ for a 1.1 per cent decline in like-for-like sales in the fourth quarter, with sales at its newsagents down 0.2 per cent.
However, when including sales from the newly acquired 298 Co-op stores, sales rose 19 per cent in the year and total revenue was 29 per cent higher in the quarter.
Shares in the group were down 2 per cent, or 6.15p at 283.85p in morning trading.
‘For the first time the business has achieved annual revenues of more than £1 billion, boosted by our transformational acquisition of 298 high quality convenience stores last year, demonstrating that this is now a business of real scale,’ chief executive Jonathan Miller said.
McColl’s has also recently signed a deal with Morrisons to be supplied with a range of products under the resurrected Safeway brand.
‘As we look ahead to next year, we will focus on delivering an enhanced customer offer in over 1,300 stores through the groundbreaking wholesale partnership we signed with Morrisons, which will see us launch hundreds of Safeway branded products, exclusively in McColl’s from January 2018,’ Miller added.
It comes as wholesaler Palmer and Harvey crashed into administration last week, sparking 2,500 job losses and putting a further 900 at risk.
Palmer & Harvey supplies more than 90,000 outlets from corner shops to Tesco and employs some 3,400 people.