McColl’s extends Morrisons wholesale and franchise relationship

Date : 01 March 2021

Patrick Mitchell-Fox

Senior Retail Analyst

Major UK convenience retailer, McColl’s has announced that it has extended its wholesale agreement with Morrisons, which will see the national supermarket operator supply the entire McColl’s store portfolio (currently over 1,200 stores) with full a range of products until January 2027.

As part of the extended agreement McColl’s will increase the number of its stores trading under the Morrisons Daily franchise to 300 over the next three years.

Q1 like-for-like growth of 7.9%

Though McColl’s total sales continue to be restrained by its store portfolio rationalization strategy, its strong underlying sales seen in 2020 have been sustained into 2021, as shoppers remain more focused on visiting local and neighbourhood stores. With Morrisons now delivering to its full portfolio, all McColl’s stores are benefitting from a more developed grocery offer including chilled and fresh ranges. However, though now able to meet bigger basket needs, at the same time McColl’s profit mix has been impacted by the decline in its traditional, higher margin, impulse missions.

Morrisons Daily driving McColl’s strongest sales

To date McColl’s has converted 31 of its larger stores to the Morrisons Daily franchise package, enabling them to access the fuller Morrisons convenience offer, including the supermarket’s own private label ranges. With this more credible grocery offer in place and underpinned by the Morrisons quality and branding, these 31 stores have proved the strongest performers across the whole McColl’s estate in recent months; convincing McColl’s management that the proposition is a highly successful solution to meeting convenience shoppers’ demands for the future.

Jonathan Miller, Chief Executive, McColl’s, commented:

‘I am delighted to extend our partnership with Morrisons by a further three years, ensuring the continued supply of a supermarket-quality offer across our entire estate, as well as the planned conversion of additional Morrisons Daily stores. Despite the challenges presented by COVID-19, the new partnership represents another significant step forward in achieving our strategic goal of increasing our fresh food offering in our store estate, while offering the best value for money for our customers. We are well positioned to continue enhancing our convenience offer and improving the quality of our estate at a time when the importance of neighbourhood stores has never been greater.’

For more insight of the evolution of the convenience channel see our latest report 'UK convenience trends 2021'