SandpiperCI selling its food retail business to Morrisons
SANDPIPERCI is selling Food Retail Limited, the part of its business which operates its supermarkets and food stores, to the UK supermarket giant Morrisons in a £60m. deal.
Morrisons has the fifth-largest market share in the UK.
It previously operated in Guernsey at what is now Waitrose in the Rohais and returned to the local market, through Sandpiper, with the franchise Morrisons Daily in 2018. It has nearly 500 supermarkets and 1,000 convenience stores in the UK.
It will take over the franchises of Morrisons Daily, Iceland, and Checkers Xpress in Guernsey and Jersey and Le Cocq’s Stores in Alderney in a £60.6m. deal.
It is not clear whether the current store brand names will be retained.
The 38 stores, which includes 10 in Guernsey, 26 in Jersey and two in Alderney are all currently supplied by Morrisons in some capacity, and 19 of those are already Morrisons Daily franchises.
The transaction will need approval from the Channel Islands’ regulatory authorities but both companies hope the deal will be completed by July.
‘We have had a solid and successful supply and franchise partnership with SandpiperCI and we have a strong relationship with the business,’ said Morrisons chief executive Rami Baitieh.
‘I look forward to welcoming 520 more colleagues into the Morrisons family, together with 38 popular and well-located convenience stores.
‘Our convenience business is now well set and growing rapidly. The addition of a further 38 stores will bring us another opportunity for growth and a strong position in the important Channel Islands’ convenience market.’
In the last 12 months the Channel Island stores had a turnover of £124.5m. – which excluding fuel sales was £118.9m.
The transaction from Sandpiper CI includes Morrisons acquiring six fuel forecourts.
The deal does not include the Marks & Spencer Jersey business which will remain part of the SandpiperCI Group.
Morrisons’ relationship with SandpiperCI dates from 2018 when the two companies signed a long-term franchise and wholesale supply agreement.
It is anticipated that some 520 store-based staff across the islands will transfer over to Morrisons as part of the sale.
Some redundancies may occur in back office roles, and Sandpiper will be consulting with affected staff members over the coming weeks.
Given the anticipated significant reduction in the size and scale of the remaining business, following completion of the sale, the SandpiperCI board has agreed to cancel all outstanding directors’ and staff share options in return for a cash payment of £2.95m. overall to shareholders.
Sandpiper has continued to perform well in recent times despite challenging market condition for retailers.
Food inflation is now easing but the company has admitted that recruitment was a big challenge in both islands.
In the first half of its most recent trading year it grew sales 4.8% like-for-like and a cost-savings programme maintained operating margins at 5.4%.
