McColl's Retail Group, the convenience store operator, hit a new five year low as it warned supply shortages and other disruption would mean significantly lower revenues than expected this year.
The ongoing nationwide shortage of delivery drivers, labour shortages at distribution centres and insufficient supply of key products, including high margin branded impulse lines, had intensified in the fourth quarter, it said.
McColl's has a wholesale agreement with Morrisons and said the two are working together to lessen the effect of the disruption, but have been unable to fully mitigate the impact.
Underlying profits in 2021 are now forecast between £20m to £22mln, with the retailer saying its lending banks remain supportive.
On a brighter note, McColl’s said Morrisons Daily stores that have been converted are operating ahead of expectations with revenues growing well ahead of the rest of the estate.
As a result, the group expects payback of converting the stores to be less than the 2-3 years previously indicated and the roll-out is being accelerated with 150 Morrisons Daily stores expected to be in operation by the end of November 2021. The target of 350 conversions will be hit well ahead of the November 2022 target date.
Jonathan Miller, McColl's chief executive, said: "It is disappointing to see supply chain issues worsen through the second half, but external factors have not eased, and continue to impact much of the UK economy.
"We are working collaboratively with our wholesale partner Morrisons to restore in-store product availability as quickly as possible.
"Despite these supply chain issues, I am delighted by the step change we are witnessing in-store performance from our Morrisons Daily conversions.”