Morrisons signs “transformational” deal with McColl’s

Supermarket Morrisons has signed a deal to become the sole UK wholesale supplier to convenience chain McColl’s.

The lucrative deal will see Morrisons supply the chain of convenience stores and newsagents across the UK with its Safeway range, which it has been developing since the end of 2016.

It now comprises a range of 400 products, many of which are made at Morrisons; food manufacturing sites.

McColl’s will have exclusive access for a year, as it looks to expand its credentials in fresh produce and become a broader retailer.

Morrisons, which began supplying Amazon with fresh, frozen and ambient products last year, said it expects wholesale supply sales to top more than £1bn with the deal.

Safeway products and national brands will be supplied to 1,300 McColl’s convenience shops and 350 newsagents across the UK as part of the deal, replacing all of the store’s existing arrangements.

The phased programme gets underway in January 2018. By the end of 2018, Morrisons expects total annual wholesale sales to be in excess of £700m.

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.”

1 Initially Morrisons will supply c.1,000 McColl’s convenience shops and 350 newsagents, with the remainder of the McColl’s estate (the c.300 recently acquired convenience shops) migrating in due course

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 best-in-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.”