Mccoll's Regulatory News (MCLS)

McColl's agrees groundbreaking new supply chain partnership with Morrisons

Release date: 1 August 2017

McColl's Retail Group ("McColl's"), one of the UK's leading neighbourhood convenience retailers is pleased to announce that, following a competitive process, it has reached an agreement for Wm Morrison Supermarkets PLC ("Morrisons") to supply McColl's growing estate of 1,300 convenience stores, and 350 newsagents.

This long-term partnership provides McColl's with a best-in-class fresh food and grocery offer through the relaunched Safeway brand, which it will enjoy exclusively for a period of 12 months. This will significantly advance McColl's fresh food credentials and provide its customers with an enhanced range. The agreement also allows McColl's to improve its commercial terms and simplify its operations as it migrates to a single wholesale partner for the entire estate.

Morrisons will supply both Safeway and branded products to McColl's, with a phased rollout programme starting in January 2018.

Jonathan Miller, Chief Executive of McColl's, said:

"As a large, leading multiple grocery retailer with its own outstanding food manufacturing capability Morrisons stands apart from the competition, and we are truly delighted to be entering into partnership with them. In McColl's, Morrisons gain a long-term partner of significant scale with a growing neighbourhood convenience estate and in Morrisons we gain access to their best-in-class sourcing and manufacturing capabilities. This will enable us to provide our customers with the highest quality fresh food through the relaunch of the much loved and trusted Safeway brand. This is a defining moment for McColl's and builds on the transformational deal we announced last year to acquire 298 high quality convenience stores."

David Potts, Chief Executive of Morrisons, said:

"We are very pleased to partner with McColl's, and look forward to developing a long and successful relationship together. We are also pleased to be reviving the Safeway brand which we know customers will enjoy.

"This new partnership is a further example of Morrisons leveraging existing assets to access the UK's growing convenience food market in a capital light way. Wholesale supply will help make us a broader, stronger business."

[1] Initially Morrisons will supply c.1,000 McColl’s convenience stores and 350 newsagents with the remainder of the estate (the c.300 recently acquired convenience stores) migrating in due course.

Enquiries

Please visit www.mccolls.co.uk or for further information, please contact:

McColl's Retail Group plc Media enquiries:

Jonathan Miller, Chief Executive Headland

Simon Fuller, Chief Financial Officer Lucy Legh, Simon Burton, Rob Walker,

Naomi Kissman, Head of Investor Relations Ewa Lewszyk

+44 (0)1277 372916 +44 (0)20 3805 4822

Notes to editors

McColl's is a leading neighbourhood retailer with a growing estate of 1,650 managed convenience stores and newsagents. We operate 1,292 McColl's branded UK convenience stores as well as 358 newsagents branded Martin's, except in Scotland where we operate under our heritage brand, RS McColl. In addition we are also the largest operator of Post Offices in the UK, with approaching 600 in-store counters/branches.

Morrisons is a major grocery retailer with 491 supermarkets and unique food maker skills, with thousands of colleagues in 17 food manufacturing sites across Britain. Morrisons has been developing a new Safeway range since the end of 2016. It now comprises hundreds of fresh, frozen and ambient food products, many of which are made in Morrisons food manufacturing sites.

This announcement contains inside information

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