Morrisons has linked up with Costcutter’s owners to manage five depots less than a month after speculation Morrisons may acquire the convenience retailer.

Costcutter-owner Bibby Line Group’s distribution arm Bibby Distribution will manage five regional Morrisons depots to improve efficiency through backhauling.

The move comes after it emerged that Morrisons and Costcutter had held talks over a possible tie-up last month.

Morrisons is targeting significant growth in the convenience sector after developing its M Local format.  

The Bibby Distribution deal comes after Morrisons announced its In Motion strategy to target supply chain efficiencies in June 2011.

Bibby business development director Ian Firth said: “The emphasis is on helping Morrisons maximise vehicle utilisation – whether that be back-loading existing store delivery vehicles with collections from local suppliers… or collecting consolidated loads to deliver into its distribution centres nationwide.”