Morrisons has announced that it is making a number of changes to its stores to “optimise its operations” and mitigate “recent significant cost increases”.
The retailer, which is entering the second year of its renewal programme designed to accelerate growth, said a recent review had identified a number of areas where the costs of operations are “significantly out of line” with usage, volumes or the value that its customers place on them. As a result, Morrisons is planning a number of changes over the next few months, specifically the closure of 52 of its cafés, all 18 Market Kitchens, 17 convenience stores, 13 florists, 35 meat counters, 35 fish counters, and four pharmacies.
The company stated that the majority of staff affected by the changes would likely be deployed in roles elsewhere in its business, but there will be a total of around 365 people at risk of redundancy.
“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,” said Rami Baitiéh, the group’s Chief Executive.
“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.
“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.”
In recent weeks, Sainsbury’s, Tesco, and other retail chains have announced job cuts in the wake of the government’s decision to increase employer national insurance contributions and the minimum wage from April.
In January, Morrisons posted its strongest quarterly sales growth figures since the start of 2021 as Baitiéh’s turnaround programme picked up speed.
NAM Implications:
- Some inevitable pruning…
- …that could impact estate footprint in your categories.
- Hopefully, these cuts will be sufficient…
- …in terms of adding to turnaround gains.
- Fingers crossed…
