My Local to focus on localisation and logistics to succeed where Morrisons failed

• Better logistics, layout and localisation forms cornerstones of My Local business
• Deal with Morrisons expected to complete in six weeks
• Former Somerfield exec John Dunman brought in as chief financial officer

Morrisons has offloaded its 140-strong convenience store chain to a team led by retail veteran Mike Greene and backed by Greybull Capital. Morrisons received £25m but will incur a loss on the disposal of around £30m. It will also remain guarantor on the leases.

The big supermarket chains have been ramping up their convenience businesses as consumers opt to shop more frequently and locally. In the 12 months to April 2015, the convenience market generated £37.7bn in sales, up 5.1% according to IGD.

Yet Greene, who has appeared on TV show The Secret Millionaire and whose involvement in the deal was first revealed by Retail-week.com last month, believes My Local can stand out from the crowd and leverage the weaknesses of his bigger rivals, which are “not always great at running c-stores”.

“The supermarkets jumped in at the same time, it was very much a ‘me too’,” Greene told Retail Week. “It’s been a frenzy. I wonder if they gave it proper consideration.

“They’re inexperienced in small-drop, frequent deliveries. We’re working with one of the largest wholesalers, they’ve got the economies of scale to do this. Distribution was a problem for Morrisons – it’s not for us.”

‘A lean team’

Greene declined to say which wholesaler My Local has partnered with.

He also said his business would benefit from a better store estate than the one Morrisons launched M Local with. Morrisons closed around 20 c-stores after chief executive David Potts joined in March.

“We’re not taking poor stores,” said Greene, who has decades of experience in convenience.

The retailer is eyeing a further 10 closed M Local stores which he said he is “confident we can make work”.  He would not be drawn on how many stores My Local could eventually open but said he had been approached by other retailers keen to get rid of stores.

Greene said My Local would have a slimmed-down operation compared to M Local. “Dalton Philips [former Morrisons chief executive] had a massive head-office team – we’ll have a lean team appropriate to our size,” he said.

He added: “Philips put too much fresh space in stores – that needs right sizing. There wasn’t enough space for beers, wines and spirits or food to go. We’ll increase those categories.”

He also said My Local would focus on convenience and the local area more than its larger rivals by empowering store managers to buy in product and support charities in the area.

Focus on local

Noting the similarity of the My Local name to Morrisons’ M Local branding, Greene said: “My Local is not a parody, it’s about creating ownership. At least 5% of all product will be local. The word local is really, really important.”

The deal with Morrisons completes within six weeks and Greene said that within a week of that, My Local branding will be installed in stores. He said within a few months “you’ll see a change to the feel of the stores”.

He conceded there would be teething problems along the way but insisted My Local’s point of difference will ensure it is “the best independent convenience chain in the UK”.

Greene has assembled a team with experience of convenience retailing. John Dunman, a former senior executive at Somerfields, is chief financial officer and chief technology officer.

Richard Collins, a former Costcutter executive, is trading director; and Paul Matton, formerly of Ann Summers, is property director.

Paul Dennis, former head of food operations for Central England Co-Operative, is My Local’s operations director.