UK retailer Morrisons beat off fierce competition from Asda to purchase convenience store chain McColl’s, which had entered administration. This represents a key move for Morrisons, as McColl’s will be its largest wholesale client, and convenience retail thrived during the pandemic when people spent more time at home and avoided busy supermarkets.
The segment has remained resilient since restrictions have ended. IGD predicts the channel will grow 12.5% from 2021 to 2026, putting it behind only online and discount in terms of growth. But unlike those channels, convenience offers the potential to boost margins. This could be invaluable for the retailer at a time when the cost-of-living crisis is sparking a price war across the grocery sector.