NEWS ShopTalk M
orrisons has announced a new, long-term
wholesale supply deal with
convenience store chain McColl’s. The group will provide Safeway products and national brands to 1,300 McColl’s convenience shops and 350 newsagents across the UK, with the new partnership replacing all McColl’s existing supply arrangements. Morrisons has been developing a new Safeway range since the end of 2016, when it reintroduced the brand. It now comprises more than 400 food products, and McColl’s is to be given a one year period of exclusive access to Safeway products.
The supermarket said the tie-up is expected to lead to wholesale supply sales of more than £1bn “in due course”.
Meanwhile, McColl’s recently announced a 7.6% jump in revenues after taking over almost 300 Co-op stores.
B A
sda has posted its worst annual figures since being taken over by American
grocer Walmart.
Britain’s third biggest supermarket chain admitted performance was “behind expectations” after pre-tax profit for 2016 fell 19% to £791.7m. Accounts filed at Companies House also showed sales fell to £21.6bn from £22.3bn as shoppers flocked to cheaper rivals.
Asda has been the worst performer of the UK’s ‘big four’ grocers. Former chief executive Andy Clarke was replaced by the Walmart veteran Sean Clarke, who took the helm last summer and has focused on dropping prices, boosting the quality of food ranges and improving customer service.
Morrisons chief executive David Potts said: “We are very pleased to partner with McColl’s. We are also pleased to be reviving the Safeway brand which we know customers will enjoy.”
McColl’s boss Jonathan Miller added: “In McColl’s, Morrisons gains a long-term partner of significant scale with a growing neighbourhood of convenience estate and in Morrisons, we gain access to their best-in-class sourcing and manufacturing.”
6 September 2017
While underlying sales for the year plunged 5.7%, Asda has pointed to recent improvements. The latest industry figures showed Asda attracted an additional 398,000 shoppers in the 12 weeks to 16 July. The Kantar data showed Asda’s sales for the period grew by 1% compared with the same period last year. Asda also reported an operating cashflow of £1.41bn, an increase of 8%, and said a dividend of £450m was paid to Walmart.
The supermarket has been hit harder than most because it refuses to join rivals in opening smaller stores.
ooths is set to undergo a financial review after allegedly breaching its loan terms,
which could force its owners to make additional payments into the business to retain control.
According to The Telegraph, senior lenders at the RBS and HSBC have instructed accountants Grant Thornton to complete an Independent Bank Review of Booths.
This kind of review often leads to owners of a company being forced to make a one-off payment to prevent the banks taking control. However, a spokesperson from Booths responded by stressing that the retailer has “not breached banking covenants”.
UK chief executive Christian Härtnagel said he plans to open a further 60 stores per year in the UK, to fill the gaps where shoppers didn’t have close access to a Lidl store. Doubling its 30 store openings from last year, Lidl has reportedly agreed on locations for between 50 and 60 stores to open over the next two years.
Mr Härtnagel also laid out plans to invest heavily in Lidl’s distribution network and said Lidl would not be revealing an online offering anytime soon in the UK.
While the investment will reportedly hit full year profits, Mr Härtnagel stated his key concern was the status of his employees after Brexit.
H
Booths, nicknamed “the Waitrose of the north” and with 31 shops around the north west of England, recorded a loss of £6.3m in 2016 compared to the prior year’s £1.1m. In addition, the 168-year-old retailer has not fully recovered from the damage caused by major floods in the north two years ago.
Management has also attributed poor sales performance to a generally competitive market and deflation brought on by the ongoing supermarket price wars.
L
idl has announced plans to open “at least one shop a week” in the UK amid a £1.45 billion expansion
scheme.
eron Foods has been bought by a discount retailer in a deal worth up to £152m.
The family-run food retailer, which employs around 3,800 people, has been taken over by B&M. B&M said it would use Heron’s chain of shops to develop a “discount convenience grocery brand”. Heron opened its first store in east Hull in 1979 and now operates more than 250 shops, predominantly across the north of England. B&M chief executive Simon Arora said the company was planning to expand and develop the Heron business, initially through the opening of between 10 and 20 new stores per year.
Heron made a pre-tax profit of £8.6m last year.
Recently, shares in B&M rose following reports that supermarket giant Asda was considering a £4.4bn takeover bid.
www.acr-news.com
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