UK's convenience store chain McColl's goes bust due to inflation; 1,100 stores and 16,000 jobs at risk

McColl's a British store chain with a network of more than 1,100 convenience stores and newsagents across the United Kingdom has gone bust in face of rising inflation. This has put 16000 jobs at risk.

The company is entering administration, a process in which a failing company seeks outside assistance in order to avoid job losses.

According to Reuters, the convenience store chain's lenders have declined to provide additional cash. Last-ditch talks with supermarket behemoth Morrisons, according to reports, have also failed.

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"In order to protect creditors, preserve the future of the business and to protect the interests of employees, the board was regrettably... left with no choice other than to place the company in administration," said McColl's in its statement.

For the process, PricewaterhouseCoopers (PwC) has been appointed as administrators. The collapsing company said that it expects PwC to make a sale of the business to a third-party purchaser "as soon as possible".

In a trading update last month, McColl's said it was impacted by reduced customer spending and continued supply chain disruption throughout the industry.

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The London Stock Exchange (LSE) has also suspended the group's shares, whose price gained 20 per cent on Friday amid hopes of a rescue deal.

Britain is facing a cost-of-living crisis as inflation reaches 7 per cent, the highest in thirty years.

As per a warning by the Bank of England, by the end of this year, because of rising energy prices, UK's inflation is expected to reach 10 per cent, a four-decade high.

The bank also warned that Britain could enter a recession, as the central bank raised its main interest rate by a quarter-point to one per cent, the highest since the 2009 global financial crisis.

Globally consumer prices have been surging as economies that have already been struggling after pandemic lockdowns, face costs aggravated by the ongoing Russia-Ukraine war.

(With inputs from agencies)