McColl’s warns over profits due to product shortages as supply crisis deepens

Morrisons Daily store operator McColl’s Retail Group has warned over annual earnings, blaming product shortages as it said the lorry driver crisis and supply chain disruption had “intensified”.

he convenience store group saw its shares plunge by more than a quarter as it said it had seen “significantly” lower sales than expected in its fourth quarter so far due to the supply woes.

The group said it was suffering shortages of key products due to shortages of HGV drivers and workers at distribution centres.

It said this came despite working with its wholesale partner, supermarket chain Morrisons, to try and lessen the impact.

McColl’s now expects full-year underlying earnings to be between £20 million to £22 million, down sharply on the £29.1 million seen a year earlier.

The group said: “As has been well publicised, external factors, including the ongoing nationwide shortage of delivery drivers, labour shortages at distribution centres and insufficient supply of key products, including high margin branded impulse lines, continue to impact the supply chain nationwide and have intensified in the fourth quarter.

“While we continue to work collaboratively with our wholesale partner, Morrisons, to lessen the effect of the disruption, we have been unable to fully mitigate the impact to stores, leading to significantly lower revenues than initially anticipated.”

The group said it was continuing to “monitor the situation” with lending banks, but stressed they remain supportive.

Jonathan Miller, chief executive of McColl’s, added: “It is disappointing to see supply chain issues worsen through the second half, but external factors have not eased, and continue to impact much of the UK economy.

“We are working collaboratively with our wholesale partner Morrisons to restore in-store product availability as quickly as possible.”

Despite the supply chain issues, McColl’s said it is ramping up its store switch to Morrisons Daily and now expects to have more than 150 shops in the format by the end of this month.

It is now ahead of target to reach the 350 Morrisons Daily store milestone.

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