Morrisons looking to sell 160 of its smaller convenience stores

Britain’s fourth biggest grocer has held talks with private equity firms to offload 160 of its M-Local stores while it focuses on fixing problems at its main supermarket chain.

It will be among the first major decisions made by chief executive David Potts, the former Tesco executive who took the reins in February.

Besides Greybull Capital, several other investors also approached Morrisons to acquire M Local convenience stores.

The Telegraph reported this weekend that the supermarket giant was looking to call time on its venture into smaller convenience stores.

A number of parties were rumoured to be interested after Morrisons announced the closure of 23 M Local stores earlier this year.

Greybull is best known for saving Monarch Airlines last year after injecting £125m of funding to keep it flying. The discussed financial terms of the potential deal remain unclear, with details expected within weeks, according to media reports.

The stores to be acquired generate close to £350m in sales. Phillips led the business into online operations and its convenience stores, but one industry insider said that the high-street stores were “losing a packet” because of “monster rents on suburban high streets”.

Morrisons was late to the convenience store market and has been playing catch up in an attempt to gain critical mass.