Morrisons’ plans to move away from its hub-and-spoke model for supplying its M Local convenience stores will enable it to press ahead with establishing a major presence in the convenience sector, according to industry experts.
This week, as it announced a 0.9% fall in like-for-likes and a 2% decline in pre-tax profits to £440m, Morrisons also announced that it will open a 100,000 sq ft bespoke distribution centre in Feltham, West London, which will have the capacity to supply 100 M Local stores.
The retailer currently has five M Local c-stores that are all stocked via daily deliveries from a nearby superstores. It is aiming to open 15 by the end of the year.
But Investec analyst Dave McCarthy described the plans for the London DC, which will be fully operational by February, as significant.
“I think this will be key to its strategy of attacking London with convenience stores,” he said.
He also said it was likely to be flexible in the type of store it chose for the M Local push, with some likely to be more than 3,000 sq ft.
Currently, stores larger than 3,000 sq ft can only open for a maximum of six hours on a Sunday, but Morrisons CEO Dalton Philips said he would push for a relaxation of the law to allow larger stores to open for eight hours on Sunday.
“The rules are arcane. It makes no sense,” said Philips. “I’ll be actively lobbying for a change to add one or two hours.”