Morrisons is relaunching the supermarket brand Safeway as part of a deal with convenience retailer McColl’s in a move that positions it even further into wholesale.
Under the deal, Morrisons will supply the high-street chain’s 1,300 shops and 350 newsagents with Safeway branded own-label food and drink products. McColl’s will have one year of exclusivity for the brand with Morrisons then potentially looking to distribute Safeway branded products to other convenience retailers.
McColl’s will be hoping the Safeway brand will give its business a boost after pre-tax profits fell from £8.2m to £4.5m in the first half of the year after its bottom line was hit by a deal to acquire 300 Co-op stores.
Retail analyst Steve Dresser says it’s a good marketing move. He believes Safeway, despite going out of business as a supermarket chain in 2005 when most of its 479 stores were acquired by Morrisons, is still a much-loved brand.
“The move generates some equity for the returning brand in the mind of McColl’s customers,” he tweeted. “It is also cheaper for Morrisons than buying the Nisa convenience chain and all the integration headaches that would have come with…