McColl’s has been rescued out of administration by Morrisons after it beat off a rival offer for the convenience store and newsagent chain.

The deal means all 16,000 staff will transfer over to Morrisons, along with 1,100 shops, and the supermarket has also agreed to rescue the McColl’s Retail Group’s two pension schemes.

Morrisons had an existing supply agreement with McColl’s and it provided a range of products under the Safeway brand.

Its final offer was accepted ahead of an improved bid made over the weekend by Asda’s owners EG Group.

The deal will be a relief not just to McColl’s employees but also to the wider parcels and e-commerce logistics sector.

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It is the largest independent operator of post offices and many of its stores contain Amazon Lockers.

It also offers services to customers wishing to return items, which aids reverse logistics operations.

Administrators PriceWaterhouseCoopers said the group had faced financial pressure over the last few years, resulting from Covid-19 related disruption and most recently supply chain challenges.

Rob Lewis, joint administrator, said: “Especially during the current economic climate, the completion of this transaction provides much needed certainty to McColl’s 16,000 staff after a period of understandable concern following the group’s challenges over the past months.”