Morrisons is shutting down approximately 100 of its convenience stores in the coming months, with seven branches already identified for closure. The retail giant announced in May that its Morrisons Daily outlets, acquired through the purchase of McColls, would be affected. The company cited cost increases from government policies, including rises in the National Living Wage and employee National Insurance contributions, as the reason for the closures. Hundreds of jobs are at risk, and a consultation process is ongoing.
Confirmed Store Closures
Morrisons has confirmed seven branches that will close: Fairfax Avenue in Hull; Esk Close in Guisborough; Zetland Road in Loftus; Stokesley High Street in Middlesbrough; Queen Street in Redcar; Middle Street in South Driffield; and Woodthorpe in York. The government stated that the closures are a commercial decision for Morrisons but acknowledged it is a concerning time for staff and their families.
Impact on Jobs and Future Plans
Morrisons has stated that the tough decision to close Morrisons Daily shops will put more staff at risk of redundancy, but the company will try to find roles for those affected. There are approximately 1,700 Morrisons Daily convenience stores across the UK, according to the BBC. Despite the closures, Morrisons opened 30 new Morrisons Daily franchise stores in the last quarter and plans to open hundreds more in the future.
Financial Context
Earlier this month, Morrisons reported a slowdown in sales growth for the latest quarter, with total sales rising 1.7% to £4 billion over the 13 weeks to April 26, compared to a 2.6% increase in the previous quarter. Like-for-like sales growth slowed to 2.2% from 2.8%. Morrisons boss Rami Baitieh expressed satisfaction with the performance, noting an encouraging start to the third quarter and hoping for a boost from the World Cup and Father's Day. Morrisons is now the sixth largest supermarket in the UK after a decline in market share.
Cost-Saving Strategy
Morrisons has set a target to save £1 billion as part of a long-term strategy to improve its fortunes. In the last quarter, the retailer achieved £48 million in cost savings. Closing about 100 loss-making convenience stores is a key part of this effort. Baitieh previously stated: "In a highly competitive market, we’re focusing hard on delivering the best value for customers to give them more reasons to shop at Morrisons."
