Mags, Fags and McColls: convenience store empire with 16,000 staff on the brink of administration as the 'public stop buying cigarettes and newspapers'

Picture: Scottish Business Insider

Mags, Fags and McColls: convenience store empire with 16,000 staff on the brink of administration as the 'public stop buy cigarettes and newspapers'

By Harry Mottram: As one commentator put it on BBC Radio 4's Today programme this morning, the British public no longer pop into a convenience store for fags and mags. 

They still pop into McColl's for food and drinks - especially in the stores where McColls have worked in partnership with Morrisons. However, there has been a shift in the way people buy their groceries with home deliveries now a big sector due to the Covid crisis. And it is true the traditional newsagent is in decline since the public read more of their news online and the vice of smoking have been in decline for decades.

This leaves McColl with its reported £93 million mountain of debt to service on the brink of falling into administration. If that happens 16,000 jobs are on the line along with the unpaid invoices of countless thousands of suppliers giving the economy another body blow.

Already according to ICSM's contacts and members the sharks are circling as many of the 1,100 stores are in prime locations and doing very well. Sadly many are not and are in a losing trade war with nearby supermarkets and independents. Morrisons already has an interest in 254 of McColl's stores and so is the most likely buyer of the failing chain after McColls have failed to find a buyer or find further lenders willing to bail them out.

Not surprisingly the firm's share fell on the Stock Market with an overall drop on 97% this year with each share word just over a penny.

ICSM's advice to its thousands of members in business is to never allow credit terms to be broken when a customer fails to pay on time. Late or non-payment is the first sign of trouble and there are now hundreds of suppliers who are concerned about the future of McColls.

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