A senior Fed official has warned that more government action is needed to prevent the collapse of more retailing groups after McColl’s went into administration but was then saved by Morrisons in the eleventh hour this morning (Monday, May 9).
Speaking to Channel 4 News on Friday, May 6, Mo Razzaq, deputy vice president of the Fed, said: The cost of electric and gas is causing huge issues. The cost of petrol and diesel is also causing a lot of issues. McColl’s are the tip of the iceberg, there’s more to come. The reason there is more to come is that not enough is being done for the retailer.”
It was announced today that Morrisons beat competition from EG Group, the petrol station operator, with an offer that will see McColl’s stores and workforce preserved in their entirety.
McColl’s currently have 1100 branches throughout England, Scotland and Wales and the administration of the company would have put 16,000 jobs in jeopardy.
The deal to save the company will be structured as a pre-pack administration, meaning Morrisons will buy McColl’s immediately after it enters insolvency proceedings overseen by PricewaterhouseCoopers (PwC).
Click here to view the interview on Channel 4 News.