Morrisons, the UK's fourth-largest grocer, has snapped up 49 former Blockbusters stores as it continues to expand its fledgling network of convenience outlets.
The deal, struck for an undisclosed sum, follows Morrisons' move earlier this month to buy eight stores formerly part of another failed UK retailer, the camera firm Jessops.
Morrisons said the former Blockbusters outlets would give it a "significant number of high street and neighbourhood locations across the country, particularly in South East England". The company hopes to have the outlets trading by the end of the summer.
Alongside the deal, Morrisons announced a change to the name of its convenience stores. Morrisons opened its first M Local outlet in April 2011 but has opted to tweak the banner to Morrisons M Local.
Morrisons, which has been slower to build a network of convenience stores when compared to rivals Tesco and Sainsbury's, wants to open "at least" 70 of the outlets by the end of 2013.
MORRISONS ACQUIRES BLOCKBUSTER STORES FOR CONVENIENCE EXPANSION
Morrisons has announced the purchase of 49 Blockbuster stores from the companies’ administrators, Deloitte, as it begins an accelerated expansion of its Morrisons M local convenience estate. The deal quickly follows Morrisons’ acquisition of seven Jessops stores earlier in the year.
The Blockbuster purchase gives Morrisons quick access to a significant number of high street and neighbourhood locations across the country, particularly in South East England as it accelerates the expansion of its Morrisons M local convenience offering. Morrisons hopes to have the stores trading by the end of the summer.
The retailer has stated its intention to open at least 70 Morrisons M local stores by the end of 2013, starting with London and the South East, where it has acquired a 100,000 sq ft multi-temperature distribution centre in Feltham, West London. This will become the hub of a bespoke distribution network in the region and is set to open later this month.
Morrisons has also announced that its convenience stores will switch from the current M local name to a new Morrisons M local fascia.
Gordon Mowat, Managing Director of Morrisons Convenience said:
“We are rolling out the Morrisons M local estate at pace this year and these acquisitions give us a kick start in securing a solid foothold in this key sector. The convenience market is growing as more people shop locally and we want to be in a position to take advantage of this.
“Morrisons M locals offer a differentiated fresh shopping experience with half the space dedicated to fresh food and scratch cooking all at great prices.”
Lee Manning, Partner Deloitte LLP, said:
“This transaction represents a good deal for both the creditors of Blockbuster and Morrisons and we are pleased that these stores have found an alternative user that can create new employment. This group of stores forms a proportion of the Blockbuster package announced for closure earlier this week and is expected to be the first of a number of group and individual store transactions to arise from the Blockbuster portfolio given the significant levels of occupier interest for many of the assets”.
Morrisons will use its position as the largest fresh food manufacturer in the UK to put fresh food at the centre of its convenience offer. All Morrisons M locals will have over 100 lines of fresh fruit and vegetables as well as strong presence for fresh meat, fish and bakery.
