Has Morrisons found a SAFEWAY into the convenience sector?

The issue of brand resurrection has been back in the news this week as Morrisons, the UK’s fourth largest supermarket chain, announced its intention to revive the SAFEWAY brand. In 2017, SAFEWAY will return after an absence of more than a decade following the Yorkshire-based grocer’s acquisition of the Safeway chain that transformed Morrisons from a regional to a national retailer. The £3bn transaction in March 2004 had spelled the end (or so it seemed) of the SAFEWAY brand, as Morrisons sold or rebranded the majority of the 479 Safeway stores it acquired. It is an interesting move by Morrisons, particularly as SAFEWAY is not to be reincarnated precisely in its previous form. The revival of the SAFEWAY brand forms part of a wider strategy to tap into the booming convenience store sector dominated by independent retailers. The observant may be aware that Morrisons’ earlier attempt to establish itself in the lucrative but competitive convenience sector came to an ignominious end less than a year ago with the divestment at a £20m loss of its 140-store M-Local business, which later entered administration under the new owners. Its fingers having been burned, Morrisons is now exploring “capital light” ways to re-enter the convenience sector, which include co-opting and re-purposing the previously well-known SAFEWAY supermarket brand to front a range of fresh products for wholesaling to independent stores, rather than establishing competing outlets. Will it pay off? Time will tell. As we have explored previously on this blog (see: here and here), provided the associations of the brand still “fit” the evolving market, reviving an old brand can be a wonderful commercial opportunity to capitalise and build on prior investment in a brand, which would otherwise go to waste. For Morrisons, the resurrection of SAFEWAY as a wholesale line offers the rare chance to launch an already-familiar brand in a new setting whilst maintaining separation between the new venture and the established business. As noted in previous posts, from an IP perspective, revitalising “zombie” brands is often beset with legal issues but Morrisons may find itself in a healthier position than many who attempt a similar feat. Despite outwardly abandoning SAFEWAY in the wake of the takeover, Morrisons clearly recognised the value and equity in the SAFEWAY brand and was prepared to maintain it at a basic level: a glance at the UK and EU trade mark registers shows that Morrisons took care both to record the new ownership of the registered rights in the SAFEWAY portfolio and to renew a significant portion of the registrations whilst the brand otherwise lay dormant. Assuming the buyout of the Safeway chain included a transfer of goodwill, we may presume that Morrisons also lays claim to the unregistered rights. Although the extended hiatus was a risk as it has left the trade mark registrations vulnerable to revocation on the basis of non-use, the resumption of use of SAFEWAY will revalidate the relevant registrations and allow Morrisons the immediate benefit of the early filing dates these enjoy. Morrisons will undoubtedly want to review and update coverage for SAFEWAY to protect the brand in its new guise, but may find a world of convenience in its existing protection.

Would you like to read more articles like this?