Convenience store chain McColl’s goes bust with 16,000 jobs at risk

Convenience shop chain McColl’s has gone bust, putting 1,100 shops and 16,000 jobs across the country at risk.

The 120-year-old company has struggled financially in recent years after witnessing soaring costs due to supply chain disruption, inflation and its large debt burden.

It said discussions with its lenders collapsed as creditors refused to extend a deadline for the retailer to find more cash.

Shares on the stock market had already been suspended.

It is a major partner with Morrisons, with McColl’s operating hundreds of convenience shops under the Morrisons Daily brand, and it is understood that Morrisons or Asda part-owner EG Group could still be intereasted in a deal.

The company said in a statement to the London Stock Exchange: “In order to protect creditors, preserve the future of the business and to protect the interests of employees, the board was regrettably therefore left with no choice other than to place the company in administration, appointing PriceWaterhouseCoopers as administrators, in the expectation that they intend to implement a sale of the business to a third-party purchaser as soon as possible.”

The first shop was opened in 1901 by Scottish footballer Robert Smyth McColl and the company became Britain’s biggest convenience retailer in the 1990s with the purchase of Martin’s newsagents. It floated on the stock market in 2017.

On Thursday evening, McColl’s said it had been in talks over “potential financing solutions.”

Simon Underwood, business recovery partner at accountancy firm, Menzies, said: “With the UK already feeling the strain of the cost-of-living crisis, this exposure to job losses could not have come at a worse time.

“It appears, higher costs may have played a part in McColl’s collapse, with many consumers looking to avoid the higher prices that are often associated with convenience shops. The rise of grocery delivery services, and post-pandemic fallout, will also have played a role in the retailer’s financial struggles.

“For businesses in a similar position to McColl’s, it is crucial to seek expert insolvency advice at the first signs of trouble, to prevent the worst-case scenario of falling into insolvency.”