McColl’s has announced that it has secured an agreement on a new supply arrangement with Morrisons, extending the existing partnership for a further three years to January 2027.
Morrisons is now the single wholesale supplier across the entire McColl’s estate and the new agreement ensures continuity of supply for the next six years.
“This enables the company to work in partnership with Morrisons to seek continuous improvement and further simplify its operations, whilst ensuring the best value across an enhanced product range for customers,” McColl’s said in a statement.
The neighbourhood retailer will continue to have access to fresh food and grocery offer through the Safeway brand, where further range extensions are planned.
McColl’s also said it will accelerate the Morrisons Daily format, with 300 store conversions planned over next 3 years. The retailer said the 31 existing Morrisons Daily stores - selling Morrisons own-brand products - have consistently delivered positive like-for-like sales performance, driven by their “higher mix of grocery sales, breadth of offer and value proposition.”
“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,” commented Jonathan Miller, chief executive of McColl’s.
“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.”
McColl’s existing banking syndicate have amended the existing debt facilities to support the agreement. The updated facility consists of a £100m revolving credit facility and an amortising £67.5m term loan, with an extension in maturity to February 2024.
