Sainsbury's picks up Morrison stores

SAINSBURY'S is to buy 14 supermarkets from rival food retailer Wm Morrison in what new chief executive Justin King calls 'a great opportunityî to up its selling space.

The stores, 13 Safeway outlets and one Morrisons, are largely in the Midlands and the North of England.

They are the latest disposal made by Morrisons to comply with the competition authorities' ruling that it offload 50 or so stores after the £3bn Safeway acquisition.

'When we announced the sale of Shaw's, our US supermarket business, we indicated that we would use a proportion of the funds generated to develop further Sainsbury's core UK supermarkets business to strengthen our market position and deliver future growth,' said King.

'Such opportunities have become increasingly rare and we are delighted to secure these stores and look forward to introducing Sainsbury's products and services to new areas and customers.'

They will add 400,000 sq ft to its selling space - almost 3%.

No price was given for the deal, but the book value of the 14 stores is put at £110m. Morrisons said the price paid was in line with its expectations. The stores being sold include the original Morrisons at Ripon, north Yorkshire.

Bob Stott, Morrisons joint managing director, said the integration of Safeway was progressing and today's deal was a further step.

In line with the Competition Commission ruling, each store sale needs to be approved by the Office of Fair Trading.