Morrisons has signed a logistics deal with Bibby Distribution, owner of the Costcutter convenience store chain reports have claimed it has been looking to buy.

Bibby will manage five of the UK retailer's distribution centres in the UK. It said the deal follows the launch of 'In Motion', an ititative developed by Morrisons to improve efficiencies in the supply chain, reduce costs and offer suppliers smaller consignments.

Ian Firth, business development director for Bibby Distribution said: "The emphasis is on helping Morrisons maximise vehicle utilisation - whether that be back-loading existing store delivery vehicles with collections from local suppliers and RCCs, or collecting consolidated loads to deliver into its distribution centres nationwide.

The centres involved include Yorkshire, East Midlands, South East, Staffordshire and the South West. Yorkshire and the East Midlands are expected to begin operations in the next three months.

Morrisons added that supplying into its distribution centre infrastructure will improve stock availability and reduce the environmental impact of transport operations.

Ross Eggleton, head of national transport for Morrisons, said: "We believe Bibby has a physical infrastructure which is geographically suited to our supplier base.

The news follows speculation Morrisons may acquire Costcutter. However, when contacted by just-food this afternoon (27 July), Morrisons said: "We don't comment on speculation about transactions."