McColl’s Retail Group (“McColl’s” or “the Company”), the UK community retailer, is pleased to announce that terms have been agreed with Wm Morrison Supermarkets Limited (“Morrisons”) to extend the number of Morrisons Daily conversions from 350 to 450 stores. The Company expects to complete all 450 conversions by the end of November 2022, compared to its previous target of 350 in the same timeframe.
Morrisons is extending its support and increasing its contribution to the enlarged conversion programme.
Morrisons Daily stores have a higher grocery mix and wider breadth of product choice, driving enhanced customer spend, frequency and loyalty. This stronger revenue performance, and a return on investment towards the shorter end of a 2-3 year payback range, underlines McColl’s decision to broaden the Morrisons Daily format across its community store estate.
Jonathan Miller, Chief Executive of McColl’s, said: “Within 12 months we will have 450 stores open and trading as Morrisons Daily, representing over a third of our total community store estate and over half of our sales. These stores have a higher grocery mix and wider breadth of product choice which is great for our customers, and with strong sales growth and better return on investment, it is great for the Company too. We look forward to continue working closely with Morrisons in the years ahead.”
Update on banking discussions
Our lending banks remain supportive, and discussions are ongoing which are expected to conclude by the publication of full year results in March 2022, at which point a further update will be given.
In the meantime, agreement has been reached to defer a financial covenant test due on 28 November 2021 to 31 December 2021, and thereafter it is expected to roll on a monthly basis. This will allow additional time for the Company to work constructively with its lending banks in regard to the terms of agreement for the upcoming financial year and the balance of the facility, which matures in February 2024.
Next scheduled announcement
McColl’s expects to publish a full-year trading update for the 52 weeks to 28 November 2021 on 8 December 2021, in which we will also provide greater insight into the performance of the Morrisons Daily format and an update on availability.