In August I wrote about the potential sale of M Local by Morrisons. That sale has now been confirmed, 10 previously closed stores are reopening, and the business is being rebranded My Local - a great name by the way.
In its results announcement today, Morrisons said that
'Convenience remains an important growth channel, and we will continue to consider capital-light, returns-enhancing opportunities in the future.'
Back in August I also mentioned franchising as being a model that could work well for Morrisons. Using its integrated supply chain to better effect by supplying franchised convenience stores seems to make a lot of sense, and neatly fits the returns-enhancing, capital light opportunity that Morrisons is looking for.
In my view we will see the battle for a greater share of the convenience market fought on two fronts now, by direct opening of stores by retailers; and by increasing use of franchising by national multiples to take market share from the symbol groups. Simply Food is well used to the franchise model and Tesco (using the One Stop fascia) is aiming to open over 180 franchised stores this financial year.
"There are more ways than one of digging for money."