Morrisons plans to ramp up the conversion of McColl’s stores to its Daily format, earmarking 132 stores for closure.
Coming less than a week after the Competition and Markets Authority (CMA) cleared Morrisons acquisition of McColl’s, the retail group has announced plans to convert the majority of the 1,164 McColl’s stores to the format. Of these 1,164 stores, 286 are currently Morrisons Daily stores. Previously, it had planned to convert 450 McColl’s stores to the Morrisons Daily format.
It also hopes to increase the pace of conversion and expects to complete all the McColl’s conversions within the next two to three years. When completed, it will bring the total number of Morrisons Dailys to over 1,000.
According to Morrisons, converting the McColl’s stores to the new format has created a 20% like-for-like sales growth immediately.
Store closures
As part of its plans for McColl’s, it has identified 132 stores where there is “no realistic prospect of achieving a break-even position in the medium term”. It plans to close these stores before the end of the year, placing 1,300 McColl’s staff at risk of redundancy although they will all be offered alternative employment at a nearby McColl’s store, Morrisons store, logistics operation or food-making centre.
Of the 132 stores that will close, Morrisons will keep 55 sites open until next year as they include a Post Office counter to “to enable them to serve their communities through Christmas and to allow the Post Office additional time to make alternative arrangements”. It is currently working with the Post Office to see if nearby McColl’s or Morrisons stores could be potential sites for replacement Post Office counters.
Management changes
As well as the changes to the McColl’s estate, the business announced some shifts in management. Online and wholesale director at Morrisons Convenience, Joseph Sutton, will take on direct responsibility for McColl’s. Meanwhile, interim CEO Karen Bird and CFO Giles David will both leave the business.
Morrisons chief executive, David Potts, said: “Today marks an important moment for the McColl’s business, colleagues and customers as we formally welcome the business and its colleagues into the Morrisons family. We are now able to begin the urgent journey to transform McColl’s into a viable, well-invested and growing operation.
“Over the last three years we have seen the significant enhancements that the conversion of a McColl’s store to a Morrisons Daily can achieve, and so I am very pleased that we will now have over 1,000 Morrisons Daily stores trading within two years,” he added. “I’m confident that the McColl’s conversions, combined with the increased competitiveness that will be unlocked through investment and synergies, will make Morrisons a growing force in the important convenience market in the years to come.”
Morrisons Convenience, Online and Wholesale Director, Joseph Sutton, said: “We have a great deal of work to do but there’s no question that McColl’s is a business with strong potential. I’m confident that the combination of McColl’s conveniently located stores and great colleagues together with Morrisons scale, brand, systems and fresh food expertise will lead to a transformation of the business.
“We very much regret the proposed closure of 132 loss-making stores but it is, very sadly, an important step towards the regeneration of the business. I am confident that McColl’s can, in the Morrisons family, once again become a growing, thriving and vibrant convenience business serving local communities across the UK.
“We are pleased to be able to offer every colleague alternative employment within the Morrisons group, but we fully recognise that this might not be a practical solution for all colleagues.”
No comments yet