Morrisons sells its convenience stores

Morrisons MedRes 05Bradford, UK: Supermarket Morrisons is to sell 140 M-local convenience stores for about £25m.

It said the buyer was a team led by the retail entrepreneur Mike Greene, funded by Greybull Capital.

The shops will be rebranded “My Local”. The 2,300 staff will be kept, with an extra 200 jobs created by reopening 10 shops that are currently closed.

Morrisons announced a review of its convenience store business in March. Earlier this year, Morrisons reported an annual loss of £792m. It now plans to concentrate on its core supermarkets business. It will keep five of its M local shops that are either on petrol forecourts or can be converted into small supermarkets.

Morrisons was laet to the convenince store concept opening its first M Local in 2011, years later than its rivals that had already set up shop in prime spots.

Morrisons expects to lose about £30m on the transaction and will also be remain liable for the leases on the shops if the new business fails.

Morrisons chief executive David Potts said in a statement: “We remain open to other opportunities in convenience in the future.”

He said the reason M local failed was because it was “unable to scale”. They made an operating loss of £36m last year.