Morrisons share price jumps as it agrees to sell 140 M Local convenience stores for £30m loss

Emma Haslett
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Morrisons said it will make a loss of £30m on the sale (Source: Getty)

Morrisons has reached a deal to sell 140 of its "M Local" convenience stores, to a team led by retail entrepreneur Mike Greene.

In a statement today, Morrisons said it will retain five of the strores, which are either on forecourts or will be converted to miniature versions of Morrisons' own stores.

Read more: Morrisons' ill-fated attempt to build a convenience arm has become a lesson for the industry

The supermarket said it expects to incur a loss on disposal of around £30m on the deal, which had been widely rumoured.

David Potts, Morrisons' chief executive, said: "Convenience is a large and growing channel in UK food retailing. Morrisons learnt much from its entry into the market, but M local was unable to scale. However, we remain open to other opportunities in convenience in the future. I would like to thank all the Morrisons colleagues for their hard work and dedication to M local."

It's the end of an ill-fated experiment for the supermarket, which began its convenience store empire with the purchase of a portfolio of 50 stores from defunct film rental chain Blockbuster in 2013.

But unlike its rivals, whose convenience store offerings provide some defence against the tide of discounters, Morrisons' smaller stores failed to shore up saids. The failure of the experiment contributed to the ousting of the supermarket's chief executive, Dalton Philips, at the beginning of this year.

But a new management team, led by chairman Andy Higginson, has been clear it wants to simplify the business, focusing on strengthening its core supermarket offering.

Greene, a veteran of McColl's and former chairman of the Association of Convenience Stores, tweeted his excitement:

Morrisons shares jumped 4.6 per cent to 176.1p in early afternoon trading.

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