Morrisons to cease working with 83 property maintenance suppliers

A Morrisons spokesperson said: “We are proposing some important changes and improvements to our maintenance model through a new national partnership with City FM, but we anticipate many of our existing suppliers to continue to work for Morrisons under subcontracting arrangements.

“We are endeavouring to communicate and execute these changes carefully and thoughtfully with all those affected.”

The move comes after last month, Morrisons had its credit rating cut after it recorded weaker sales and profits.

Credit rating agency Moody’s downgraded the chain, after cautioning that its ability to repay roughly £7.5 billion of debts had moved from stable to “negative”.

Morrisons was last year taken over by US private equity firm Clayton, Dubilier & Rice for £7 billion.

The new owner sold 87 petrol stations to push through the takeover after the UK’s competition watchdog opened an investigation into the move, raising concerns that the deal could lead to higher petrol prices for customers.

Clayton, Dubilier & Rice also owns Motor Fuel Group, which runs 921 forecourts across the country. The Competition and Market Authority raised potential competition concerns in 121 local areas in England, Scotland and Wales.

Last year, the Morrisons also purchased convenience store chain McColls out of administration. The deal, worth £109 million, was given the green light from the Competition and Market Authority in October. Morrisons agreed to sell 28 of McColls convenience stores after the authority raised concerns over local competition.

Last month, the supermarket chain launched a new wave of price cuts, announcing that it had invested £25 million to reduce prices by an average of 19 per cent.

In its most recent trading update, released last year for the 13 weeks ending July 31, Morrisons noted that consumer sentiment had continued to be subdued.

Group revenue for the quarter was up 4.5 per cent from £4.58 billion the year prior. Like for like sales, excluding fuel, also improved from the previous quarter. Adjusted EBITDA was £177million, down from £356 million last year, reflecting a number of “temporary and transitional factors”.

Speaking at the time, David Potts, Morrisons chief executive, said: “It’s clear that the cost of living crisis is starting to change customer shopping patterns in many ways.

“The speed, scale and severity of cost and energy price increases, exacerbated by the terrible war in Ukraine, had significant impacts through the quarter, but the market is still growing and the energy price guarantee will ease pressure on consumers. We are doing everything we can to keep prices down for customers.”