McColl’s failure will affect parcel industry and small traders

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Convenience store and newsagent chain McColl’s is on the verge of collapse and is currently in ‘emergency talks with lenders’ to raise funds to avoid insolvency, according to The Grocer. Home delivery expert ParcelHero says McColl’s is an integral part of parcel delivery infrastructure in the UK and must not be allowed to fail. The company’s head of consumer research, David Jinks M.I.L.T., shares his thoughts:

McColl’s is not only an important part of our high street, with around 1,300 stores, but it is also essential for the role it plays in supporting home deliveries and parcels operations.

McColl’s is the largest independent operator of post offices. It runs around 600 inside its stores, often in areas where there are no longer any other branches. These provide an important service for individuals and local businesses who have not moved on to courier options for their shipments.

In addition, the stores often contain Amazon Lockers, which offer significant convenience for online shoppers who may well have recently returned to the office and not be at home for deliveries. Similarly, many McColl’s stores feature CollectPlus collection points, which are convenient not only for picking-up online orders but also returning unwanted items. These are important cogs in the wheels of e-commerce.

McColl’s had been expanding pre-pandemic and is midway through converting many stores to the Morrisons Daily brand, which is proving successful. However, the impact of the pandemic was particularly strong on the company, which also suffered significant stock availability problems. It had been hoping for a Christmas bounce-back but recently conceded it had seen ‘a material step-down in footfall due to the surge in Covid-19 cases relating to Omicron, particularly over the Christmas period, impacting trading. While demand has since picked up, revenues in the first quarter are behind expectations’.

McColl’s shares dived after the company issued a profit warning last month and conceded that a takeover approach by an unnamed suitor had already collapsed. The company carries debts of almost £170m (US$223m), with a lending syndicate that includes Barclays, HSBC, NatWest Group and Santander UK.

However, there is some cause for optimism. This week McColl’s revealed two-year sales growth of almost 6% in the 11 weeks to February 13, and there’s confidence that a revised banking package can be put in place. The McColl’s share price has risen in recent days and Morrisons is said to be keeping a close eye on the situation.

Many high street retailers continue to struggle in the aftermath of Covid and the rise in e-commerce. ParcelHero’s report 2030: The Death of the High Street has been discussed in Parliament. It reveals that unless retailers develop an omnichannel approach, embracing both online and physical store sales, the high street as we know it will reach a dead end by 2030.

Read the full report at: https://www.parcelhero.com/content/downloads/pdfs/high-street/deathofthehighstreetreport.pdf

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