Supermarket group Morrisons has claimed winner after a fierce bidding war with Asda owner EG Group over the weekend to buy convenience store chain McColl’s out of administration.
Morrisons will pay off McColl’s £170m debts and take on its 1,160 shops and pension schemes, with 2,000 members.
McColl’s ran into difficulties as it attempted to update the range of food it sold and came up against Covid-related supply chain problems.
The convenience store empire McColl’s will now be unable to sell booze or Lotto tickets after it was bought out of administration by Morrisons, with all 1,100 stores affected.
McColl’s is Morrisons’ biggest wholesale client and with the pair having a joint venture of 270 Morrisons Daily stores, it would have created “a considerable problem” if another party were to buy the c-store operator, Shore Capital director and head of research Dr Clive Black says.
“Morrisons now has a platform to grow its convenience business in a very low cost way,” he tells Retail Gazette.
Retail consultant Bryan Roberts, founder of Shopfloor Insights, concurs. “I just couldn’t believe that Morrisons didn’t do it sooner, especially when McColl’s share price was so low.”