Ask Onix
Morrisons announces closure of 100 convenience stores
The UK supermarket chain Morrisons has revealed plans to close 100 of its Morrisons Daily stores in the coming months, citing prolonged financial losses and escalating operational costs driven by government policies.
Reasons behind the closures
The affected stores, acquired through the 2022 purchase of McColls, have been unprofitable for an extended period. Morrisons stated that recent years have seen a sharp rise in expenses due to government decisions, including increases to the national living wage and National Insurance contributions.
"This situation has been made worse by significant cost increases resulting from government policy choices, making it even harder to return these stores to profitability," the company said.
Impact on employees and previous cuts
The decision follows last year's closure of 52 cafes and 17 convenience stores, which put hundreds of jobs at risk. Additionally, Morrisons announced last month that around 200 roles at its Bradford headquarters were under threat.
While the exact number of redundancies has not been confirmed, it is understood that hundreds of employees will be affected. A consultation process is set to begin shortly, with Morrisons pledging to explore alternative roles for affected staff.
"We will do everything we can to support our colleagues and find other opportunities within the business," a Morrisons spokesperson said.
Store performance and future plans
The chain operates approximately 1,700 Morrisons Daily stores across the UK and opened over 120 franchise locations last year. The stores earmarked for closure have consistently underperformed and remained loss-making despite efforts to improve their viability.
Morrisons has not disclosed which specific stores will close but confirmed they are spread nationwide. The company remains optimistic about its expansion strategy, aiming to open hundreds more franchise stores in 2026.
Government response and industry context
A government spokesperson described the closures as a commercial decision, acknowledging the concerns of affected workers and their families. They highlighted available support, including free advice from Acas on workplace rights and best practices.
Retailers have faced a surge in costs since April of the previous year, including higher employer National Insurance contributions and increased minimum wages. Food and drink producers are also now required to cover the costs of recycling packaging under the government's Extended Producer Responsibility (EPR) programme.
Inflation remains a persistent challenge, with newly released figures showing food price inflation at 3% in April-above the overall inflation rate of 2.8%. Analysts have warned that UK food inflation could reach 10% by the end of the year due to geopolitical tensions, including the conflict involving the US, Israel, and Iran.
Industry reaction to government proposals
This week, reports emerged that the government had urged supermarkets to voluntarily freeze prices on essential groceries in exchange for regulatory relief. The proposal was met with strong opposition from industry leaders.
"The supermarket sector is already highly competitive. It's hypocritical for the Treasury to ask us to cap prices while its policies are driving up costs," said Justin King, former CEO of Sainsbury's.
