McColl’s Retail Group is set to complete its 2018 target of switching 1,300 stores to Morrisons supply, ahead of schedule.
The group has already completed the transition of more than 1,000 stores to Morrisons supply and expects to hit the target number for this year in early August.
Around 400 Safeway-branded lines have now been rolled out to Morrisons-supplied stores, driving a 5% increase in own brand sales, McColl’s said in its interim first half results.
However, like-for-like sales fell by 2.7% in the first half, which the group attributed to “unprecedented” supply chain disruption following the collapse of former supplier Palmer & Harvey.
Pre-tax profits slumped from £4.5m to £2.3m, relating in part to the costs associated with the administration of P&H, the store closure programme and a health & safety fine.
Chief executive Jonathan Miller said: “During the first half we experienced unprecedented supply chain disruption following the collapse of P&H last November. This temporary upheaval has inevitably impacted sales and margin performance in the circa 700 stores that were formerly supplied by P&H, and has also had knock-on effects on the rest of the estate.
“However, the switch to Morrisons supply in the 1,300 stores intended for this year has been accelerated, and will now be completed in early August, ahead of schedule. At the same time we have relaunched the Safeway brand at McColl’s, providing our customers with a more competitive and higher quality food offer.
“We will therefore have a progressively stronger and simpler operational position with a more compelling offer as we move through the second half and into 2019.”