McColl’s Retail Group, one of the UK’s leading neighbourhood convenience retailers, has reached an agreement for Morrisons to supply McColl’s growing estate of 1,300 convenience stores, and 350 newsagents.
This long-term partnership provides McColl’s with a best-in-class fresh food and grocery offer through the relaunched Safeway brand, which it will enjoy exclusively for a period of 12 months. This will significantly advance McColl’s fresh food credentials and provide its customers with an enhanced range. The agreement also allows McColl’s to improve its commercial terms and simplify its operations as it migrates to a single wholesale partner for the entire estate.
Morrisons will supply both Safeway and branded products to McColl’s, with a phased rollout programme starting in January 2018.
Jonathan Miller, chief executive of McColl’s, said: “As a large, leading multiple grocery retailer with its own outstanding food manufacturing capability Morrisons stands apart from the competition, and we are truly delighted to be entering into partnership with them. In McColl’s, Morrisons gain a long-term partner of significant scale with a growing neighbourhood convenience estate and in Morrisons we gain access to their bestin-class sourcing and manufacturing capabilities. This will enable us to provide our customers with the highest quality fresh food through the relaunch of the much loved and trusted Safeway brand. This is a defining moment for McColl’s and builds on the transformational deal we announced last year to acquire 298 high quality convenience stores.”
David Potts, chief executive of Morrisons, said: “We are very pleased to partner with McColl’s, and look forward to developing a long and successful relationship together. We are also pleased to be reviving the Safeway brand which we know customers will enjoy. “This new partnership is a further example of Morrisons leveraging existing assets to access the UK’s growing convenience food market in a capital light way. Wholesale supply will help make us a broader, stronger business.”
Commenting on the deal, Catherine Shuttleworth, CEO at shopper and retail marketing agency Savvy, said: “This supply deal demonstrates the changing nature of the destiny of our big four retailers as they change from retailers to retailer, wholesaler and supplier. It makes sense for Morrisons and McColl and piles on the pressure to the “traditional” wholesale businesses like Palmer & Harvey and Nisa. With the upcoming CMA review of the sector we should expect more of the unexpected and we anticipate that the shake up of UK grocery supply businesses is about to start a chain of significant changes to the structure of the marketplace.”