Morrisons mulls offers on smaller Safeway stores

Morrisons will make a decision on the future of the 120 smaller Safeway stores it inherited within the next two months.

Joint managing director Bob Stott said that the grocer has received numerous offers from interested parties for the stores, which all measure 15,000 sq ft (1,395 sq m) or less. Offers have come in for single stores, tranches and the whole group.

Former Safeway trading director Jack Sinclair remains interested in acquiring all 120 shops. It is thought he has brought private equity firm Dawnay Day on board to provide funding.

Stott said: 'We are considering the levels of people's money. We are doing a commercial exercise and have to see if it gives us better value (to sell) or trade them hard ourselves.'

The 120 stores could be worth about£400 million, according to analysts.

Morrisons has so far sold 33 of the 52 Safeway stores the OFT said it must dispose of following the£3 billion deal. It is finalising contracts on 14 of the remaining stores and is open to offers for the final five.

Morrisons has converted 23 Safeway stores to date at an average cost of£1.5 million each. Before Christmas trading begins, 53 will have been completed and the programme will then resume in February.

Morrisons will complete its range harmonisation programme, led by joint managing director Marie Melnyk, by the end of the autumn.