Convenience veteran Mike Greene has insisted his new c-store business will not be compromised by poor store locations and said he was “super excited” about his private equity-backed capture of the Morrisons M Local c-store business.
Speaking to The Grocer after announcing the deal to buy 140 stores for £25m with the backing of Greybull Capital, Greene was keen to dismiss suggestions the business would be hampered by poor locations for many of the stores, a criticism that was often levelled at Morrisons.
“It is a bit of a case where one person says something and everyone else follows assuming it is a fact,” he said. “The fact is the network is no better and no worse that the stores owned by Tesco or Sainsbury’s. With all these things there are some good, some bad and some ugly. Morrisons CEO David Potts closed down the ugly ones soon after he got there.”
Greene insisted his new property director, Paul Matton, had looked long and hard at the estate and was convinced of its viability. He is not planning any disposals and will look to re-open 10 of the stores already closed by Morrisons.
This will result in the creation of 200 new jobs in the reopened stores as well as safeguarding the roles of the 2,300 staff that are currently employed in M Local stores. The business will have an initial turnover of £215m, rising to £230m with the reopened stores. Greene said he believes sales could hit the £300m mark within a year to 18 months.
He said the business was not currently making a profit as a result of the logistics, head office costs and depreciation of assets which weigh heavily on a supermarket such as Morrisons but insisted a leaner convenience operator could make it profitable.
The stores will be rebranded My Local, with Greene as CEO of the new business. He will spearhead a team of five senior directors and two experienced managers who will be given the task of developing formats and ensure that each store meets its local needs rather than simply employing a ‘one size fits all’ strategy.
Greene said the My Local name was an important tool for the new operation. He said it was based on much of the research into the convenience market he had overseen during the time he owned Him! Research and Consulting. It also chimes with the Heart of the Community work he was involved with as chairman of the Association of Convenience Stores. The new brand will also play a key role in marketing the new stores. “It is certainly not simply a play on words of M Local,” Greene stressed.
Rebalancing the range
Like M Local, the new stores will has a strong focus on fresh, but Greene suggested that in the desire to make fresh a point of difference, Morrisons had over-spaced the fresh offer in its convenience stores.
“I think this meant that key categories such as confectionery or soft drinks were under-spaced and the heavy weighting of fresh sometimes made the stores local empty,” he explained. “There will have to be a rebalancing of the range.
Greene added his mission was to ensure the stores were fully stocked at a fair price. The business will be supplied directly by one of the UK’s leading wholesalers although he would not say which at this stage. The name of the company is set to be revealed tomorrow (11 September). “It is one of the UK’s biggest wholesalers with decades of experience of dealing with small drop shipments,” Greene said.
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