McColl's Retail Group PLC (LON:MCLS) shares fell despite the corner shop operator reporting results in line with expectations and strong trading so far in March and a survey indicating the new importance of local shops post-pandemic.
Research by Barclaycard found over nine out of 10 of people who have shopped close to home in the past year say they will continue to do so, amid a shift to working from home because of coronavirus lockdowns.
Almost two-thirds of consumers in the UK have shopped locally in the past year, the credit card company found, leading to a 63% rise in spending at specialist food and drink stores such as butchers, bakeries and greengrocers last month.
As for McColl's, it reported 8.8% growth in like-for-like sales in the 15 weeks of its new financial year to March 14. Having previously given a trading update for the first 12 weeks of this period, this implies the past three weeks were up 12.4% on last year.
Results for the retailer's past year showed like-for-likes growth of 12% for what was a 53-week period to November 29, 2020.
Annual pre-tax losses were slashed to £2.7mln from £95.9mln, on total revenue up 3.2% at £1.26bn.
“Over the last 12 months we have seen strong like-for-like sales growth, driven by the positioning of our stores in key neighbourhood locations and our strong customer offer,” said chief executive Jonathan Miller.
“Despite the operational challenges of the pandemic, we have made good progress on our customer-focused strategic change programme.”
He hailed the recent supply deal with Morrisons, ensuring continued food supply across for the next six years, with 300 stores to be converted to the Morrisons Daily format over the next three years.
“Looking ahead to 2021, whilst uncertainties and restrictions remain, there is no doubt that the strategic importance of neighbourhood stores has never been greater, and we are well positioned to deliver for customers and shareholders, as we continue to enhance our convenience offer,” he said.
McColl's shares were down 2% to 31.37p by mid-morning, though still up over 50% since early November.
Broker Peel Hunt said there was “not as much detail about the Morrisons Daily stores as we would like: this is the more important development here for years”.
The analysts added: “The shares seem cheap if a route to stability, let alone growth, could be mapped out: we believe there is value here but it may take time to emerge.”