Shares in Wm Morrison Supermarkets (LON:MRW) have gained ground in today’s session as the blue-chip grocer announced that it had inked a wholesale supply deal with McColl’s. The new partnership is expected to take wholesale supply sales to more than £1 billion in due course.
As of 13:34 BST, Morrisons’ share price had added 0.71 percent to 242.10p, largely in line with the broader UK market, with the benchmark FTSE 100 index currently standing 0.70 percent higher at 7,423.59 points. The group’s shares have added a little over a third to their value over the past year, and are up by nearly five percent in the year-to-date.
Morrisons announced in a statement today that it had agreed a new wholesale initiative which will see the company start supplying both Safeway products and national brands to 1,300 McColl’s convenience shops and 350 newsagents across the UK. The FTSE 100 grocer will supply McColl’s shops, with a phased programme starting in January, and by the end of next year, the company expects total annualised wholesale sales to all its partners to be in excess of £700 million.
“This new partnership is a further example of Morrisons leveraging existing assets to access the UK’s growing convenience food market in a capital light way. Wholesale supply will help make us a broader, stronger business,” Morrisons’ chief executive David Potts commented in the statement.
The 15 analysts offering 12-month price targets for Morrisons for the Financial Times have a median target of 225.00p on the stock, with a high estimate of 275.00p and a low estimate of 170.00p. As of July 28, the consensus forecast amongst 21 polled investment analysts covering the blue-chip supermarket advises investors to hold their position in the company.