A year in convenience: McColl’s deal dominates as Asda moves for Co-op forecourts

In the world of Convenience, new rapid delivery players have dominated the headlines, but the major multiples continue to encroach.

The biggest story was the collapse of McColl’s Retail Group and its hard-fought rescue by Morrisons. The saga rumbled on for three months from when it was first reported in February that McColl’s was in talks with advisors to find either a buyer or new funding in a last-ditch bid to stave off administration. But no such salvation came. Over the next few weeks the retailer issued further profit warnings, and CEO Jonathan Miller left the business. It was forced to delay the publication of its annual results and suspend trading of its shares, which had slumped to around 1p.

The inevitable happened on 6 May when the business fell into administration. What followed was a bitter tug of war between Morrisons, the convenience chain’s primary supply partner, and Asda and EG Group owners the Issa brothers. Ultimately, Morrisons emerged as the winner, but having paid around £200m for a business with which it had taken great pride in securing a ‘capital light’ wholesale agreement in 2018.

At the time there was a great deal of speculation as to how many of the 1,164 McColl’s stores its new owners would actually want to hang on to. That became clear in November when, after a CMA inquiry, Morrisons finally took control of the c-store chain. Having already agreed to sell 28 stores to appease the CMA’s competition concerns, Morrisons said it would permanently close 132 stores that had been loss-making for some time. The more positive note was that it also confirmed plans to convert the majority of McColl’s stores to the more successful Morrisons Daily format over the next two to three years.

Despite not securing the coup of snatching McColl’s from under the nose of its rival, the Issas didn’t spend much time licking their wounds. While continuing to roll out Asda on the Move forecourt stores to EG Group sites, Asda opened its first standalone Express convenience store in October and later revealed plans to open 300 by 2026. This was already just a couple of months after agreeing to buy 132 forecourt stores from The Co-op for around £600m.

This was not just an important deal for Asda. It also played a key role in bringing down debt at the Co-op, a key priority for new Co-op Group CEO Shirine Khoury-Haq, who landed the top job at the society when predecessor Steve Murrells stepped down in May.