Written by: Julie Palmer
Published: 9th September 2015
The supermarket chain Morrisons is to close a number of UK stores and shed hundreds of jobs as it aims to cut costs by around £1 billion.
A total of 11 Morrisons stores are set to close in the coming weeks, with around 900 employees expected to lose their jobs as a result.
The locations of the 11 stores have not been revealed with company bosses in the process of informing the individuals whose jobs are to go of the situation.
“This is a difficult decision but one which we cannot see any way through to make those stores viable,” said David Potts, Morrisons’ chief executive.
In addition to its planned store closures, Morrisons revealed this week that it will sell a total of 140 convenience stores around the UK in a move expected to raise £25 million in cash.
The M Local stores are being sold after consideration was given to their position within the supermarket chain’s overall business as part of a broad operational review initiated in March of this year.
“That review concluded that M local would have required significant further investment in new sites, plus additional capital expenditure and lease commitments, to reach profitability,” a statement on the matter explained this week.
While the M Local stores will be rebranded and no longer owned by Morrisons, their 2,300 staff members are all set to keep their jobs as the outlets continue to trade under new ownership.
“Convenience is a large and growing channel in UK food retailing. Morrisons learnt much from its entry into the market, but M local was unable to scale,” said David Potts, who took up his role as Morrisons CEO in March.
The sale of its loss-making M Local stores is seen as an important step in improving competitiveness across the Morrisons business as the supermarket battles for customers with the likes of Tesco, Asda and Sainsbury’s, as well as with discounters including Aldi and Lidl.
“Morrisons stores are old-fashioned, not as cutting edge as their rivals but they are dragging themselves into the modern age,” commented Julie Palmer, a retail analyst from the corporate recovery specialists Begbies Traynor.
Regional Managing Partner
Julie is a vastly experienced business recovery specialist and advises directors and sole traders during times of financial insecurity. She is highly regarded across the industry and is a member of the Insolvency Practitioners Association and a Fellow of The Association of Business Recovery Professionals.
29th September 2020
The government has announced extensions to corporate insolvency and governance measures brought in to offer some extra breathing space to companies and their directors during the coronavirus pandemic.Read More
24th September 2020
Newly introduced Covid restrictions could prove to represent a “crushing blow” for thousands of companies across that UK.Read More