Safeway is coming back! Morrisons revives supermarket brand after deal with McColl's

Britain's fourth-largest supermarket chain Morrisons is resurrecting the Safeway brand as a new range of products for wholesalers and independent retailers.

It has struck a deal with grocery chain McColl's which will see the supermarket exclusively supply Safeway own-brand products to 1,300 convenience stores and 350 newsagents from January.

The revival of the supermarket brand comes more than 13 years after Bradford-based supermarket giant Morrisons acquired Safeway in March 2004 in a £3bn deal.

Jonathan Miller, chief executive of McColl's, said the tie-up was "transformational" for the company and would prove to be a "defining moment" after boosting its estate by snapping up 298 Co-op stores.

He said: "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."

Morrisons chief executive David Potts said: "We are also pleased to be reviving the Safeway brand which we know customers will enjoy."

He added: "Wholesale supply will help make us a broader, stronger business."

McColl's announced last month that its pre-tax profits almost halved from £8.2m to £4.5m in the first half of the year after the firm factored in the cost of the Co-op deal.

Revenue rose 7.6% to almost £505m in the first six months to 28 May, with like-for-like sales growing 0.2%.

In March, Morrisons reported a return to annual sales growth for the first time in five years, with profits up 50%.

Pre-tax profit for the year to 29 January came in at £325m, on the back of a 1.7% increase in comparable sales.

Shares in Morrisons rose more than 1% in early trading on the London Stock Exchange on Tuesday.