Morrisons has secured a £220 million “sale and leaseback deal”, which will accelerate the launch of its convenience arm, Morrisons Daily.
According to property agents, the former Big 4 grocer, has agreed to sell seven of its distribution warehouses to Intermediate Capital Group on contracts of up to 25 years, with part of the proceeds allowing the supermarket giant to convert McColl’s stores into Morrisons Daily branches.
As a result, Morrisons is looking to convert around 1,000 McColl’s sites and use some of the cash generated to slash the prices of certain products to help customers deal with the ongoing cost-of-living crisis.
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The move comes as the grocer acquired symbol group retailer McColl’s in May for £189 million and 268 of the 1,100 already trading under the Morrisons Daily banner.
Last month, CEO David Potts said the company planned to convert the “substantial majority” of stores to the Morrisons Daily format following a review with a plan to increase the number of stores under the convenience arm’s fascia.
He said: “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.”
The news comes as Morrisons has been dealt with another blow after credit rating agency, Fitch, cut the supermarket chain’s credit rating over its £6.6 billion worth of debt and shrinking profits.
According to Fitch, the former Big 4 grocer has driven up prices faster than its rivals resulting in market share being lost
