Retail group McColls has reported full-year revenue up 2.3% to £1.25bn, due to strong demand since the onset of the pandemic, although this was offset by store closures during lockdown periods.
The trading update for the year ended 29 November showed like-for-like sales growth of 12%, compared to flat figures for 2019, with particularly strong performance in fresh food and tobacco.
Despite strong demand, changing shopping behaviour has resulted in margin pressures due to a change in product mix. The company also experienced lower services revenues and ongoing Covid-19 related costs.
During the year, 'store optimisation' plans were accelerated, with 179 stores closed in line with the strategy to focus on larger, more profitable, convenience stores.
Adjusted earnings before tax are expected to be between £29m to £30m - compared to £32.1m last year.
McColls' debt reduction programme saw debt fall to £91.4m from £94.1m in 2019, despite delays in the sale of its head office - now expected to finalise in January, with a third of the £7.3m sale price already received.
Chief executive Jonathan Miller said: "Despite the challenges of 2020, the pandemic has reinforced our confidence in our ongoing strategic change programme.
"The importance of neighbourhood stores has never been greater, and we are well positioned to continue enhancing our convenience offer by further developing our partnership with Morrisons, and further improving the quality of our estate and our overall customer experience."
To improve efficiency, McColls stated it is investing in systems, processes and space optimisation, alongside the rationalisation of the store estate.
The company has an estate of around 1,300 managed convenience stores and newsagents. It operates McColl's branded convenience stores, as well as newsagents branded Martin's across the UK, except in Scotland where its operates under the heritage brand RS McColl.
