Morrisons Announces Plans to Close 100 Stores
Morrisons is set to close 100 stores over the next few months, attributing the decision to rising costs influenced by government policy choices.
The supermarket chain indicated that the affected convenience stores have been loss-making for an extended period and were acquired through its McColls acquisition in 2022.
The company stated that recent years have seen these challenges worsen due to
"significant cost increases resulting from government policy choices", though it did not provide further specifics.
Previous Store and Job Reductions
This announcement follows Morrisons' decision last year to close 52 cafes and 17 convenience stores, actions that placed hundreds of jobs at risk.
Additionally, last month Morrisons revealed that approximately 200 jobs at its Bradford headquarters were at risk.
Consultation and Job Risks
The supermarket described its proposal to take the
"tough but necessary decision"to close more Morrisons Daily stores, which will put more staff at risk of redundancy. A consultation process is expected to begin shortly, although the company has not disclosed the number of jobs potentially affected.
Store Network and Performance
Morrisons currently operates around 1,700 Morrisons Daily convenience stores and opened over 120 franchise stores last year.
The company did not specify which stores are targeted for closure but noted they are those
"whose performance has been challenged for a number of years and which are loss making, despite remedial action".
It reiterated:
"This situation has been exacerbated in more recent years by significant cost increases resulting from government policy choices, which have made returning these stores to profitability even more difficult."
Future Expansion Plans
Morrisons emphasized it has a
"robust expansion plan"for 2026 and anticipates opening hundreds more franchise stores in the coming years.
Industry-Wide Cost Pressures
Many retailers have reported being impacted by a wave of additional costs since April last year, including increased employer National Insurance contributions (NICs) and higher minimum wages.
Moreover, food and drink companies are now responsible for covering the cost to councils of recycling packaging for certain products, under the government's Extended Producer Responsibility (ERP) programme.
Inflation has remained above the Bank of England's 2% target for an extended period. Recent inflation data shows that the annual rate of food price increases was 3% in April, exceeding the overall inflation rate of 2.8%.
Warnings have been issued that food inflation in the UK could reach 10% by the end of the year, influenced by the US-Israel conflict involving Iran.
Government Price Freeze Proposal and Industry Reaction
This week, multiple supermarket sources reported that the government urged retailers to voluntarily freeze prices on key groceries in exchange for regulatory relief.
The proposal was met with strong opposition from industry leaders.
Justin King, former CEO of Sainsbury's, criticized the suggestion, stating that the British supermarket sector is already highly competitive and called it
"hypocritical"for the Treasury to request price caps while its policies contribute to inflation.
