Morrisons confirmed yesterday that it is planning to close four of its supermarkets following a review of the performance of its store estate.
The outlets set for closure over the coming months are in Ince in Wigan, Shirley in Solihull, Swindon in Wiltshire, and Crawley in West Sussex. The four stores employ around 400 staff.
A spokesperson for Morrisons said: “Following a review of all our supermarkets’ performance, we’ve unfortunately identified four unprofitable stores, where even our best estimates suggest losses will continue to worsen.”
The retailer stated the review was part of its strategy to build a “broader, stronger” Morrisons. It is planning to invest in four new stores this year.
The retailer added: “We will now be going through a consultation process at the stores and discussing how to reduce redundancies and, where possible, redeploy our highly valued colleagues within the business.”
Latest industry data from Kantar showed Morrisons to be the worst-performing of the big four supermarket chains, with its sales falling 2.7% year-on-year over the three month period to 11 August. It was suggested this week that Morrisons is vulnerable to a takeover bid from international buyers that could be encouraged by the drop in the value of Sterling and the slide in the chain’s share price.
A whole host of retailers have been closing underperforming units over recent years in the face of rising costs and competition from online and discount rivals. Waitrose announced last month that it was closing seven loss-making supermarkets.
NAM Implications:
- Every retailer will want/need to shed unprofitable stores from their estates…
- …and Morrisons clearly have replacement in mind.
- What is more concerning is today’s international news that Germany’s Douglas is to shut dozens of stores…
- …based upon lack of business potential, albeit profitable…
- Time to anticipate further shrinking of physical retail estates.
