Supermarket group Morrisons (MRW.L) will begin a pilot trialling its new convenience store division tomorrow, with the first of three stores under the ‘M Local’ brand.

The Bradford-based food retailer has chosen Ilkley as the site of its first mini market ahead of two others, which will also be based along the M62 corridor on the outskirts of Manchester and Liverpool.

Unlike its competitors, Morrisons intends to stock its convenience stores with frequent deliveries from its larger superstores nearby and intends to price its ‘convenience’ goods along the same lines as the supermarkets.

The launch of M Local is part of the growth strategy initiated by new chief executive Dalton Philips when he joined the company in January last year.

Philips has predicted that the convenience store market will grow at twice the rate of stores in the traditional supermarket sector.

Julian Bailey, spokesman for Morrisons Supermarkets, confirmed that the launch will diversify the group’s portfolio from the current average store size of 25,000 – 30,000 square feet.

He said, ‘A lot of convenience stores have a very poor proposition where you will see some dusty old tomatoes priced more expensively than the full format stores. We will have a much better quality offer and much better value.’

The news comes just four months after the group made a £32 million investment in US online grocery business Fresh Direct enabling it to parachute its staff into the business to learn how it has been profitable delivery perishables in the metropolitan district of New York.

Bailey said Morrisons remains “skeptical” about the customer appetite for food delivery through online, but says any launch will not be before 2013 when its staff have garnered research from time spent at Fresh Direct.

He explained, ‘Customers want to touch and feel the food and know the quality. It is a bricks and mortar market for food retailing. We will launch an online food business in 2013/2014 if we think we can make it profitable.’

Analysts remain bullish on Morrisons, noting its low exposure to long term leases and high operating margin – around 5.3 per cent compared to Sainsbury’s 3.5 per cent.

Morrisons is the UK’s fourth largest food retailer and has set a growth target of an additional 2.5 million square feet of new floor space over the next three years.

• The author of this article owns shares in Morrison (WM) Supermarkets.

Click here to read more about the launch of M Local