McColl’s rescue plan adds to retail woe

A POTENTIAL rescue deal for McColl’s Retail that could leave investors out in the cold caused a huge sell off for the convenience store chain’s shares today.

The stock lost half its value, falling 2.1p to 1.85p, as McColl’s said that ongoing efforts to tackle its short-term funding issues were increasingly likely to result in “little or no value being attributed to the company’s shares”.

While talks with its lenders continue, McColl’s added Easter trading had been hit by reduced consumer spending and continued supply chain disruption.

The group, which has 1100 managed convenience stores and newsagents, now expects its annual results to be no higher than the level achieved in 2021, despite its Morrisons Daily stores continuing to perform strongly.

McColl’s plight added to the downbeat mood in the retail sector as investors fret about cost of living pressures.

Analysts at Deutsche Bank warned firms with the highest proportion of sales from lower-income demographics will suffer most in 2022, a view reflected in the City firm’s “sell” recommendation on B&M European Value Retail.

It also removed a “buy” rating for Marks & Spencer and lowered its price target by more than a quarter to 185p. The shares were today 3.85p lower at 148.05p as Deutsche Bank’s note flagged the impact of higher energy costs on M&S’s food business.

In a session when the FTSE 100 index slid 2.3% or 172.65 points to 7349.03, defensive stocks Unilever and Reckitt Benckiser offered some shelter as their shares rose 1%.

The FTSE 250 index fell 428.96 points to 20,452.84, with Rolex retailer Watches of Switzerland among the stocks 5% or more lower.