Morrisons is understood to have invited bids for Safeway’s 12 stores in Northern Ireland as well as just over 100 of Safeway’s smaller stores on the mainland.
The closing date for bids for the smaller stores passed on Friday July 23, while the deadline for bids for the Northern Ireland stores is believed to have passed about six weeks ago.
Morrisons is keeping 30 of the most profitable small Safeway stores and selling off the rest in tranches of eight, said one source close to the company.
While selling Safeway’s c-stores probably made sense given Morrisons had no experience in small formats, pulling out of Northern Ireland was more surprising, said analysts. “There will be a lot of interest from Tesco and probably some from Sainsbury, although this could raise competition issues. Musgrave could also be interested,” said one. Most of the stores were probably too small to attract Asda, he added.
Morrisons sent out information packs about the bulk of Safeway’s smaller stores late last month. Somerfield and the Co-operative Group lead the pack of potential bidders, followed by Waitrose, although it is only likely to look at stores larger than 8,000 sq ft.
However, Tesco and Sainsbury would need to gain consent from the OFT even if they were
only interested in a handful of stores because of previous undertakings made to the OFT, said an OFT spokeswoman.
“Any of the retailers originally blocked from buying Safeway would have to get consent from us if they wanted to buy any Safeway assets other than the divestment stores.”
Separately, the OFT has also launched a probe into Morrisons’ handling of Safeway divestment stores after reports it was running them down to disadvantage future owners.
As part of the deal to buy Safeway, Morrisons gave undertakings that it would maintain the competitiveness and viability of the 52 Safeway stores it was required to divest, said the spokeswoman.
This would also involve an undertaking not to discriminate against divestment stores by reducing stock or excluding them from special offers.
However, Morrisons dismissed the allegations and insisted it was fulfilling all of its obligations to the OFT.
Elaine Watson
The closing date for bids for the smaller stores passed on Friday July 23, while the deadline for bids for the Northern Ireland stores is believed to have passed about six weeks ago.
Morrisons is keeping 30 of the most profitable small Safeway stores and selling off the rest in tranches of eight, said one source close to the company.
While selling Safeway’s c-stores probably made sense given Morrisons had no experience in small formats, pulling out of Northern Ireland was more surprising, said analysts. “There will be a lot of interest from Tesco and probably some from Sainsbury, although this could raise competition issues. Musgrave could also be interested,” said one. Most of the stores were probably too small to attract Asda, he added.
Morrisons sent out information packs about the bulk of Safeway’s smaller stores late last month. Somerfield and the Co-operative Group lead the pack of potential bidders, followed by Waitrose, although it is only likely to look at stores larger than 8,000 sq ft.
However, Tesco and Sainsbury would need to gain consent from the OFT even if they were
only interested in a handful of stores because of previous undertakings made to the OFT, said an OFT spokeswoman.
“Any of the retailers originally blocked from buying Safeway would have to get consent from us if they wanted to buy any Safeway assets other than the divestment stores.”
Separately, the OFT has also launched a probe into Morrisons’ handling of Safeway divestment stores after reports it was running them down to disadvantage future owners.
As part of the deal to buy Safeway, Morrisons gave undertakings that it would maintain the competitiveness and viability of the 52 Safeway stores it was required to divest, said the spokeswoman.
This would also involve an undertaking not to discriminate against divestment stores by reducing stock or excluding them from special offers.
However, Morrisons dismissed the allegations and insisted it was fulfilling all of its obligations to the OFT.
Elaine Watson
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