Morrisons rescues McColl’s from administration
Morrisons has purchased around 1,100 McColl’s stores after the convenience chain briefly went into administration.
Reports over the weekend suggested both Morrisons and EG Group were in talks to buy the convenience retailer but administrator PwC said late Monday that Alliance Property Holdings, part of the Morrisons group, had snapped up the business, saving all 16,000 jobs. Morrisons has also agreed to rescue two pension schemes, which have more than 2,000 members.
Morrisons has an existing relationship with McColl’s and although the majority of the group’s stores trade under the McColl’s brand, 270 operate as Morrisons Daily concessions.
According to PwC, McColl’s had faced financial pressure over recent years resulting from Covid-19 related disruption and, most recently, supply chain challenges, creating issues in product availability.
Mixed trading also impacted the retailer in March and April 2022. While a recovery in trading performance had continued during the first half of March, the business experienced softer trading through the Easter period, PwC said, impacted by reduced consumer spending and continued supply chain disruption across the industry.
“Especially during the current economic climate, the completion of this transaction provides much needed certainty to McColl’s 16,000 staff after a period of understandable concern following the group’s challenges over the past months,” said PwC joint administrator and partner Rob Lewis. “As well as saving thousands of jobs, this deal secures a platform for the trustees of the group’s pension schemes to enter into arrangements which will protect the pensions entitlements of so many people. All in all, a really positive outcome.
“Morrisons' wholesale supply agreement will continue in place after the transaction minimising disruption to customers and employees as all stores will continue to trade. We wish Morrisons well with integrating McColl’s into their business.”