A sign bearing the Morrisons supermarket logo.
Credit: Shutterstock, P.Cartwright.
In 2021, Morrisons was snapped up by US private equity giant Clayton, Dubilier & Rice in a £7 billion deal – a takeover funded mostly by debt.
But the price of that deal is still being felt.
Since then, the supermarket has faced rising interest payments and squeezed profit margins, making it harder to keep up with cut-price rivals like Aldi and Lidl.
Retail analysts say the debt-fuelled buyout has hamstrung Morrisons’ ability to invest in loyalty schemes and compete on price.
Now, hundreds of jobs are at risk as the supermarket giant trims the fat to stay alive.
Hundreds of jobs at risk as supermarket giant trims the fat to stay in the game.
Morrisons is wielding the axe in a sweeping shake-up that will see 52 of its in-store cafés and 17 convenience stores shut shop, as the embattled supermarket chain looks to cut costs and regain its footing in the fiercely competitive grocery market. Morrisons started as an egg and butter merchant in Rawson Market in 1899 in Bradford. Now, the closures, announced this week, will put around 365 jobs at risk, though the supermarket insists the majority of affected staff are expected to be redeployed elsewhere in the business.
This latest round of cutbacks will also see the end of all 18 ‘market kitchens’, as well as 13 florists, 35 meat counters, 35 fish counters, and four pharmacies, as the chain attempts to streamline its in-store offerings and ‘focus investment into the areas that customers really value,’ according to chief executive Rami Baitiéh.
Speaking about the cuts, Mr 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.”
The move is expected to roll out over the coming months and comes as Morrisons battles to stay relevant amid the rapid rise of discounter rivals. In 2022, Aldi overtook Morrisons as the UK’s fourth-largest supermarket – a blow that still stings for the Bradford-based brand.
Morrisons, which employs around 95,000 people across its 500 supermarkets and 1,600 Morrisons Daily stores, has been under growing pressure to provide better value in an increasingly price-sensitive market.
The Morrisons Daily stores facing closure are the smaller convenience formats that typically offer extended opening hours. Meanwhile, the café closures will affect stores in major cities including London, Leeds, Portsmouth, and Glasgow.
In a bid to soften the blow, the supermarket says it is exploring partnerships with third-party providers to take over certain services in-store and “provide a relevant specialist offer.”
This isn’t the first major player to call time on its cafés. In January, rival Sainsbury’s also scrapped its remaining café operations, bluntly admitting that most shoppers “do not use the cafés regularly.”
It’s a bitter pill to swallow for loyal customers who saw the in-store café as part of the Morrisons charm – a budget-friendly bacon bap and brew after shopping. But in today’s climate, supermarkets are being forced to cut down on all non-essentials.
Whether this back-to-basics approach will be enough to revive Morrisons’ fortunes remains to be seen, but sadly, café culture in British supermarkets is going cold.
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