UK supermarket chain Morrisons has officially announced plans to close 100 lossmaking convenience stores, putting hundreds of jobs at stake as it struggles with significantly increasing operational costs and debt pressures.
As per the retailer, the affected stores had remained unprofitable for years, with recent UK government policies aggravating the situation.
Morrisons blamed raises in national insurance contributions, minimum wage spikes, and the latest packaging recycling regulations for adding major financial strain on the business.
Previously, the Chief executive Rami Baitiéh explained the situation as an “avalanche of costs” facing supermarkets across the UK retail sector.
The shutdowns are part of wider cost-cutting measures introduced since Morrisons’ takeover by private equity firm Clayton Dubilier & Rice in 2021.
Moreover, the company has already shut cafés, pharmacies, meat counters, and florists in several stores.
Despite aggressively expanding into convenience retail via its Morrisons Daily chain and the 2022 acquisition of McColl’s stores, the supermarket continues to battle heavy debt.
Morrisons reported annual losses of £318 million and still carries net debt of £3.2 billion.
According to the company, consultations with workers and unions will start in the near future, while efforts will be made to offer affected workers alternative roles at nearby stores and factories.
