Morrisons has never been shy about making bold, strategic moves. When it acquired Kiddicare, it seemed like a slightly curious acquisition.

Morrisons has never been shy about making bold, strategic moves. When it acquired Kiddicare back in 2011, it seemed like a slightly curious acquisition to some. However, there were a number of good reasons for it. Firstly, Morrisons was acquiring a very solid and profitable company, along with a successful e-commerce business, at a time when it hadn’t optimised its own capability in this area. Not only that but it also allowed the company to expand into a whole new market.

Likewise, although Morrisons has been slower than others to develop a sizable non-food offering, this area remains an important part of its expansion strategy - and it looks like the company is ready to make up for lost time with its Nutmeg clothing line, expected to open in 100 stores in time for Easter. Morrisons has also been talking publicly about plans for an online grocery store in the UK and already holds a 10% stake in US online grocer Fresh Direct.

With so many irons in so many fires, perhaps it’s no surprise that Morrisons has just bought 49 stores from the administrators of Blockbuster to act as new homes for its M Local convenience stores. Apart from anything else, this latest acquisition shows that Morrisons is taking the expansion of its convenience business seriously. After all, this follows the recent acquisition of seven stores from Jessops.

The Blockbuster purchase is especially interesting, however, as it not only gives the company a number of key locations in the South East, but coincides with the acquisition of a 100,000 square feet distribution centre which will be used, amongst other things, to service its network of new stores. With assets like these, it’s clear that Morrisons is planning on rolling out the M Local estate at pace this year and that these acquisitions will give it a kick-start in securing ‘a solid foothold’ in this key sector, as the company hoped.

It seems like a very good strategy, if you ask me. By using these recent high street failures as an opportunity to pick up big swathes of commercial property, Morrisons will be able to leapfrog the likes of Waitrose and Asda in the convenience market very quickly. The company has already announced that it has a goal of opening 70 Morrisons M Local stores by the end of the year.

Whilst this is good news for Morrisons, such bold plans for growth are likely to put even more pressure on franchise convenience businesses like Costcutter and Spar to improve their service and compete in a more sophisticated way. This is surely a good thing for us consumers; after all, as more and more well-known companies enter this market, convenience alone won’t be enough to make a store successful anymore, as it is no longer the differentiator. Breadth of product range and price, and a brand like Morrisons, will bring more than just convenience to the convenience store.

I’m not normally a betting man but, if I were to make a wager, my money would be on Morrisons making a big success out of M Local. In fact, if the company’s combination of bold decision-making and clever acquisitions is a sign of what’s to come, I think that Morrisons could well end up becoming the king of convenience.

  • Dan Coen, director, Zolfo Cooper