Morrisons blames Labour for closure of 100 lossmaking stores
Morrisons has taken aim at Labour policy for “significant cost increases” as it announced the closure of 100 lossmaking stores.
The supermarket chain said on Thursday that it will close the 100 unprofitable Morrisons Daily convenience stores, in a move which could affect hundreds of jobs.
Morrisons has faced steep debt costs following its £7bn takeover by private equity firm Clayton Dubilier & Rice (CD&R) in 2021.
The group blamed the government’s tax and regulation policy for the closures, though the Financial Times reported the affected stores had been unprofitable for years.
Supermarkets rage over tax burden
“This situation has been exacerbated in more recent years by significant cost increases resulting from government policy choices, which have made returning these stores to profitability even more difficult,” it said.
Supermarkets have hit out at the government over the significant costs they face from tax rises and regulatory pressure, including hikes to employment costs and the Extended Producer Responsibility (EPR) sustainability packaging tax.
Earlier this week, it emerged that the government had been urging supermarkets to cap prices on certain products including milk and bread, as Rachel Reeves pushes to stem the rising cost of living caused by the Iran war.
The proposal was dubbed “completely preposterous” by the boss of Marks & Spencer, while a City analyst criticised Labour for “losing its mind in an orgy of neo-Soviet policy ideas”.
Morrisons cuts jobs in AI push
Reeves said on Thursday she will cut tariffs on 100 food products but the industry warned this measure will “barely touch the sides” and called on the Chancellor to cut supermarket’s energy bills if she wants them to keep prices down.
Morrisons’ store closures, first reported by The Grocer, come after the supermarket said last year it is closing 17 Morrisons Daily stores, along with 52 cafes.
Just last month, Morrisons confirmed 200 jobs at its Bradford headquarters are at risk as part of a restructuring move which is set to replace a number of manual tasks with AI.
The supermarket took on significant debt as part of its takeover by CD&R and is eyeing up plans to sell off £1bn worth of its property portfolio in its bid to pay this off.
Morrisons says its £3.1bn debt pile has been cut by 46 per cent since chief executive Rami Baitiéh joined the grocer in 2023 and kicked off a drastic turnaround plan.