Fresh produce is at the core of McColl’s’ growth strategy following strong food sales figures during the coronavirus crisis.
Chief executive of convenience retailer McColl’s, Jonathan Miller, said the business had seen “extraordinary change” arising from the crisis, predicting that convenience retailers will have to offer greater meal solutions and fresh produce going forward.
Total like-for-like sales in the past quarter was up a whopping 8.3 per cent for the business, although store closures due to the crisis hit overall revenue, which was down one per cent to £604.8m.
Profit margins were also slightly lower as shoppers moved away from impulse buys and bought more bulk products during the lockdown period, which tend to have a lower margin.
Miller said:“We have seen an extraordinary change since the onset of the crisis. Strong demand, reaching double digit like-for-like sales in recent months, has been accompanied by a significant shift in the pattern of trade. Food grocery and alcohol sales have been particularly strong, in line with our longer-term strategy to grow these categories as part of our total sales mix. Meanwhile, customers have been spending less on impulse and buying more multipack products.
“Fundamentally, the pandemic has served to reinforce our conviction in our ongoing strategic change programme to serve our customers with a modern, local convenience offer with better meal solutions, fresh groceries and alcohol. What is clear isthat the strategic importance of our neighbourhood stores and convenience retail to local communities has never been greater and, through implementing our strategy and improving our customer proposition, I remain confident in our long-term prospects.'
McColls’ financial report also stated that demand remains strong, but margins were still tight, adding it is “difficult to predict the full impact of Covid-19”.
Even though the lockdown period saw many households return to the big weekly shop, McColl’s’ report observes that convenience retail remains well positioned, as more people work from home.
“Consumers are increasingly opting to shop locally, utilising their neighbourhood retailers for their household needs and we saw reduced visit frequency offset by a strong increase in basket sizes,” the report states.
McColls’ financial report also highlights how the business has provided free food and goods to NHS workers at Great Ormond Street Hospital during the crisis.
