Morrisons revives Safeway brand in McColl's supply deal

Marco Green
August 1, 2017

Morrisons is to start supplying both Safeway products and national brands to 1,300 McColl's convenience shops and 350 newsagents across the UK.

Focusing on the supply chain partnership, Morrisons chief executive David Potts said: "We are very pleased to partner with McColl's, and look forward to developing a long and successful relationship together".

Morrisons will begin to supply McColl's in January 2018, and expects total annualised wholesale sales to all of its partners combined to be in excess of GBP700.0 million by the end of that year.

Jonathan Miller, chief executive of McColl's added that the convenience business was gaining access to "best-in-class sourcing and manufacturing capabilities" through the long-term partnership, which would provide an enhanced range and advance McColl's credentials. Moreover, current trading at Nisa is strong, and while we value all our members, the McColl's business was a low-margin contract.

The announcement comes more than 13 years after the Yorkshire based supermarket giant acquired Safeway in a £3bn deal in March 2004.

BT Expedite - now Aptos - also noted how the Amazon-Morrisons deal could begin a trend where other retailers may "jump on that bandwagon" by identifying the benefits of using an existing third-party technology infrastructure to support new distribution channels.

Speaking, to Richard Willis, VP Solutions Management EMEA at Aptos, today, he said it is this convenience shopping trend which is driving these partnerships.

Elsewhere, Catherine Shuttleworth, CEO at 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".

She also pointed to the proposed Tesco-Booker deal.

"With the upcoming CMA review of the sector we should expect more of the unexpected and we anticipate that the shake up of United Kingdom grocery supply businesses is about to start a chain of significant changes to the structure of the marketplace".

Other reports by Click Lancashire

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