Alldays blamed a failed pricing initiative for depressing its interim results released this week, but chief executive Stuart Lawson said the foundations for recovery were now in place.
The c-store chain made an operating loss of £1.5m for the six months to April 29, but Lawson said an attempt to drive sales growth by cutting prices had backfired and adversely affected results.
He said a 10-month range of price cuts, some across whole stores and others just on specific lines, had failed to generate sufficient extra sales, and the loss of margin had affected the results.
Lawson said action was taken to restore margins at Easter and sales had grown 6% since then. He said he expected Alldays to move into operating profit in the second half but warned it could be several years before it achieved an impact on debts.
At April 29 bank loans totalled £185.9m and interest costs for the six months were £7.8m, pushing the pre-tax loss up to £9.3m.
The huge debts were built up as Alldays bought out the regional development companies which ran over half its stores. With 28 taken over, and four buying out Alldays interest in their companies, the process has been completed, leaving 616 company owned stores and 29 operated by franchisees.
Lawson said the management had inevitably been distracted while the RDCs were bought in, but they would now be able to concentrate on rebuilding the business.
Alldays also announced management changes. Steve Henshaw becomes property and legal services director, while Lawson was formerly director of operations.
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