The nationwide chain has 1,400 stores and newsagents employing more than 16,000 staff, including one in Scarborough at the corner of Westwood Road and Valley Road.
McColl's Retail Group said that the company's lenders did not want to extend banking agreements which had been keeping the business afloat.
Supermarket chain Morrisons did propose a last-minute rescue deal, but this was also rejected by lenders.
In a statement, McColl's said: "In order to protect creditors, preserve the future of the business and to protect the interests of employees, the board was regrettably therefore left with no choice other than to place the company in administration."
The retailer has struggled during the pandemic with supply chain issues, inflation and millions worth of debt.
Accountancy firm PwC is set to be appointed as administrators and will search for a buyer "as soon as possible".
According to its website, McColl's serves four million customers every week and was founded in Glasgow by Scottish footballer Robert Smyth McColl in 1901.