In March, Morrisons reported a return to annual sales growth for the first time in five years, with profits up 50%. Following the acquisition, the latter converted most Safeway's 479 stores into Morrisons shops, while others were sold off.
New Safeway products have been in development since the end of 2016 when Morrisons relaunched the brand as a range for wholesale to independent retailers. The line now comprises over 400 fresh, frozen and ambient foods, many of which are made in Morrisons' food manufacturing sites.
McColls is to be granted a year's worth exclusivity of the Safeway name.More news: Fiat Chrysler Automobiles NV (F) Receives Consensus Recommendation of "Hold" from Brokerages
The deal will see Morrisons supply both products from the relaunched Safeway brand and branded products to McColl's, with a phased rollout programme set to commence in January 2018.
He said: "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". Under the terms of the deal, Morrisons will initially supply around 1,000 McColl's convenience shops and 350 newsagents. The remainder of the estate, the 298 stores it snapped up from the Co-op, will be "migrating in due course".
Morrisons has announced a new, long-term wholesale supply deal with convenience store chain McColl's.More news: Seahawks sign Kam Chancellor to three-year, $36 million extension
Under chief executive David Potts, Morrisons has canned its convenience stores and become a wholesaler, reviving the Safeway brand 12 years after buying it. Moreover, current trading at Nisa is strong, and while we value all our members, the McColl's business was a low-margin contract.
"The deal will also allow Morrisons to make better use of capacity at its 17 United Kingdom food processing plants".
"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", added Miller.More news: EA will merge BioWare Montreal with Motive Studios
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