Mccoll's Regulatory News (MCLS)

McColl's Retail Group plc, one of the UK's leading convenience retailers, ("McColl's" or "the Group") today announces its third quarter trading update for the 13 week period ended 27 August 2017.

STEP CHANGE IN SALES GROWTH DRIVEN BY INTEGRATION OF 298 NEW CONVENIENCE STORES

 POSITIVE LFL SALES CONTINUE

Financial highlights and operational highlights:

· Total revenue up 31.1% for the quarter and 15.8% year to date following successful integration of 298 acquired convenience stores

· Q3 like-for-like (LFL) sales1 up 0.7%, split as follows:

o LFL sales in convenience stores up 0.7%

o LFL sales in newsagents up 0.3%

· LFL performance in recently acquired and converted stores2 up 2.6% in the quarter

· Year to date LFL sales up 0.4% driven by growth in key grocery categories

· All 298 newly acquired convenience stores successfully integrated by mid-July 2017

· New wholesale supply partnership with Morrisons announced on 1 August 2017

· Three further convenience store refreshes successfully completed with 20 more planned by the end of the financial year

· The Group remains on track to achieve results for the full year in line with management's expectations

Jonathan Miller, Chief Executive, said:

"This has been a significant quarter for McColl's with the integration of all 298 of the acquired convenience stores completed and the announcement of a groundbreaking new supply partnership with Morrisons, beginning in January 2018.

"The 298 newly integrated convenience stores have driven strong revenue growth, and our existing estate has continued to perform well, delivering a second consecutive quarter of positive like-for-like sales growth.

"We continue to look at opportunities to further enhance organic growth, and are pleased by the progress we are making with our convenience store refresh trial. Customer feedback has been positive and the early performance has been very strong, with significant sales uplifts and increased participation in key convenience categories, including fresh and chilled food.

We're delighted to have secured Morrisons as our long-term wholesale supply partner and, with recent research confirming that the Safeway brand resonates with over two thirds of shoppers3, we are excited to be relaunching it within McColl's stores. We're confident this partnership will significantly enhance our fresh food credentials and we expect a material sales and profit benefit in the medium term."

[1] Like-for-like sales reflect sales from stores that have traded throughout the current and prior financial periods, and sales include VAT but exclude sales of fuel, lottery, mobile phone top up and travel tickets.

[2] LFL sales in stores acquired or converted between 2015-2016 which have traded for over 12 months.

[3] https://www.retail-week.com/sectors/grocery/data-safeway-still-resonates-with-two-thirds-of-shoppers/7025151.article?blocktitle=Elsewhere-in-retail...&contentID=19651 

Enquiries

Please visit www.mccolls.co.uk or for further information, please contact:

McColl's Retail Group plc Media enquiries:

Jonathan Miller, Chief Executive Headland

Simon Fuller, Chief Financial Officer Lucy Legh, Rob Walker,

Naomi Kissman, Head of Investor Relations Ewa Lewszyk

+44 (0)1277 372916 +44 (0)20 3805 4822

Notes to editors

McColl's is a leading neighbourhood retailer in the independent managed sector running 1,640 convenience stores and newsagents. We operate 1,289 McColl's branded UK convenience stores as well as 351 newsagents branded Martin's, except in Scotland where we operate under our heritage brand, RS McColl. In addition we are also the largest operator of Post Offices in the UK, with approaching 600 in-store counters/branches.