Morrisons buys Blockbuster sites to open smaller stores

Morrisons hope to expand into the small stores market. Picture: Contributed
Morrisons hope to expand into the small stores market. Picture: Contributed
Share this article
Have your say

SUPERMARKET chain Morrisons has snapped up 49 sites from collapsed video rental chain Blockbuster as it ramps up plans to expand its convenience store business.

While yesterday’s deal will not prevent any of the job cuts already announced by Blockbuster administrator Deloitte, Morrisons said it hoped to create about 1,000 jobs as it reopens the shops as part of the supermarket’s convenience arm.

The precise locations of the stores have not been disclosed as talks involving landlords continue, but are understood to include three sites in Scotland.

Morrisons – the UK’s fourth-biggest grocery business – also announced the rebranding of its M Local convenience business to Morrisons M local.

The swoop on the Blockbuster stores follows the recent acquisition of seven sites from failed camera retailer Jessops as Morrisons takes advantage of quick access to high street locations to build up its convenience chain.

It is accelerating expansion plans after struggling to compete because of its small number of convenience stores, as well as a lack of grocery delivery service.

The group, which currently has 12 M Local branches, reported a disappointing 2.5 per cent decline in like-for-like sales for the six weeks to 30 December, which followed a 2.1 per cent decline in the previous quarter.

The Bradford-based business is leading a fightback under recently appointed chief executive Dalton Philips, launching an advertising campaign fronted by TV presenters Ant and Dec earlier this year and sponsoring hit shows Britain’s Got Talent and Ant & Dec’s Saturday Night Takeaway.

Morrisons hopes to have at least 70 convenience stores by the end of 2013. It is expected to announce the latest move towards a full-scale online food delivery service alongside its annual results on 14 March.

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.”

Many of the Blockbuster stores being snapped up are understood to be located in the south-east of England – an area where Morrisons is keen to increase its presence – and are expected to open for trading by the end of the summer.

The stores bought are among the 164 earmarked for closure in recent days by Deloitte, a move that threatens about 800 jobs and comes on top of 168 closures and 760 job cuts previously announced at the rental chain.

Blockbuster, which had 528 stores and employed about 4,200 staff, collapsed into administration last month after struggling to adapt to the changing market and rivalry from internet retailers including iTunes, Amazon’s LoveFilm and Netflix.

Morrisons’ larger rivals, Tesco and Sainsbury’s, have been ­dramatically expanding their convenience store offerings in recent years.