Morrisons has confirmed it will close 11 supermarkets, just a day after it announced the sale of its 140 M local convenience stores. We look at why the supermarket giant is getting rid of so many shops.
• What has been announced today?
New chief executive David Potts said he had decided to close 11 Morrisons supermarkets - “with great regret”. It is not yet clear which stores he is referring to, but it is believed up to 900 staff could lose their jobs.
• And what about its convenience stores?
Morrisons confirmed yesterday it will sell 140 of its M local stores to retail entrepreneur Mike Greene. This was very much expected, with the supermarket announcing a review of its convenience store business back in March.
• How many jobs will go there?
Hopefully none. Mr Greene said he plans to keep all the stores open, running them under the rebranded name My Local. As such all 2,300 staff would be retained, he said.
• So what is behind all the sales?
Both the store sales and closures are part of a dramatic overhaul by the new management. Morrisons has been blighted by falling sales and profits are way down. To fix this, Mr Potts has embarked a £1 billion cost-saving plan - hence the recent announcements.
The convenience stores were offloaded as Morrisons had failed to make much headway in this space, with the boss remarking it had arrived “15 years late” in 2011.
Likewise the 11 supermarkets set to close were seen as financially unviable.
• Could we see more shops being closed?
It is possible. Morrisons said that it had cut £189 million over the past six months, so there is still a long way to go before it reaches its £1 billion target.
There has been no indication from management that there would be any further closures, but it cannot be ruled out at this early point in the revamp.
As Mr Potts remarked in a speech this morning: “It will be a long journey”.