Morrisons To Buy 49 Blockbuster Stores

Supermarket chain Morrisons has bought 49 stores from failed video group Blockbuster in order to expand its range of 'local' shops.

The shops, the majority of which are in the south east, will be turned into large 'convenience' stores to rival those operated by Tesco (Other OTC: TSCDY - news) and Sainsbury (LSE: SBRY.L - news) 's.

Blockbuster administrators have announced that a total of 324 stores will close, with more than 1,500 jobs at risk

Morrisons says its plan will create around 1,000 new jobs.

The UK's fourth-biggest supermarket chain also plans to rebrand its convenience store business from M Local to Morrisons M Local

Morrisons had already acquired seven stores from collapsed camera retailer Jessops as it seeks to take advantage of quick access to high street locations to build up its convenience chain.

It is accelerating expansion plans after struggling to compete because of its small number of convenience stores, as well as a lack of a grocery delivery service.

Analysts have put the ability of Sainsbury's, Waitrose and Tesco to weather the economic storm down to the large number of local stores they have opened in the lucrative south east.

Morrisons, which currently has 12 M Local stores, reported a disappointing 2.5% drop in like-for-like sales for the six weeks to December 30, which followed a 2.1% decline in the previous quarter.

The Bradford-based business is leading a fightback under recently-appointed chief executive Dalton Philips.