McColl’s said this long-term partnership will provide it with a ‘best-in-class fresh food and grocery offer’ through the relaunched Safeway brand, which it will enjoy exclusively for 12 months.
Morrisons will supply both Safeway and branded products to McColl’s, with a phased roll-out programme starting in January 2018. Initially Morrisons will supply about 1,000 McColl’s convenience stores and 350 newsagents with the remainder of the estate (about 300 convenience stores) migrating in due course.
McColl’s noted that the agreement also allows it to improve its commercial terms and simplify its operations as it migrates to a single wholesale partner for the entire estate.
Jonathan Miller, chief executive of McColl’s, commented: “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 gains 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.”
David Potts, chief executive of Morrisons, added: “We’re 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.”