Morrisons is to shut almost 100 fresh counters, more than 50 cafés and 17 convenience stores as part of a major cost-cutting programme that could see nearly 400 jobs go.
CEO Rami Baitiéh said the measures, which come as it enters the second year of his turnaround programme, came in the face of significant cost increases. Baitiéh has previously blasted the government for its measures in the November budget, and warned of more cuts in the pipeline.
Morrisons, which has already made more than £600m in cost savings and productivity changes in the past two years, said a “wide-ranging” review had identified a series of areas where the cost of operations were significantly out of line with usage, sales volumes or the value that customers place on them.
In the next few months it plans to close 52 cafés, 17 convenience stores, 13 florists, 35 meat counters, 35 fish counters and four pharmacies.
It is also closing all 18 branches of its Market Kitchen format, the grocery/takeaway fusion concept that first launched in Canning Town and now has operations across the UK.
The supermarket claimed the vast majority of staff affected by the changes would be deployed in suitable roles elsewhere within Morrisons, but said a total of 365 jobs were at risk of redundancy.
With Morrisons is due to announce its first quarter results on Wednesday, the move is a sign of continued financial pressure on the operation, despite plaudits received by Baitiéh since his arrival from Carrefour.
He has repeatedly said Morrisons sees Market Street and its fresh counters as a “point of difference” to rival supermarkets, while refusing to rule out “modernisation”.
Morrisons major shake-up
The closures come just a week after The Grocer revealed Morrisons is to relaunch its Market Street proposition as part of an overhaul of the retailer’s trading team dubbed “Morrisons Magic”.
Group trading director Andrew Staniland has kicked off a major shake-up of its trading team, which has seen a consolidation of its category buying teams, with five layers of reporting being reduced to three.
Morrisons has insisted it does not plan any redundancies as a result of the trading restructure.
Baitiéh said: “The changes we are announcing today are a necessary part of our plans to renew and reinvigorate Morrisons and enable us to focus our investment into the areas that customers really value and that can play a full part in our growth.
“Morrisons cafés are rightly famous for their great quality well-priced food, their place in the local community and their appealing mix of traditional favourites alongside exciting new dishes. In most locations the Morrisons café has a bright future, but a minority have specific local challenges and in those locations, regrettably, closure and re-allocation of the space is the only sensible option.
He added: “Market Street is a beacon of differentiation for Morrisons and we remain committed to it. But as we modernise we are making some necessary changes to the areas of the model which are simply uneconomic. In some stores where we are closing counters or cafés, we plan to work with third parties to provide a relevant specialist offer.
“Although these changes are relatively small in the context of the overall scale of the Morrisons business, we do not take lightly the disruption and uncertainty they will cause to some of our colleagues. We will of course take particular care to look after all of them well through the coming changes.”
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