Morrisons to cut hundreds of jobs and close cafes in huge shake-up
Supermarket giant Morrisons has put 365 jobs at risk after it revealed plans to close more than 50 of its cafes.
The Yorkshire-headquartered chain said 52 of its cafes, 17 convenience stores and dozens of meat and fish counters at its shops are slated for closure.
Morrisons said the closures are part of a “wide-ranging” review of the business.
As well as the cafes and convenience stores, 13 florists, 35 meat counters, 35 fish counters and four pharmacies and all 18 Market Kitchens are to be closed.
At the end of January, City PM reported that the Yorkshire-headquartered chain has achieved a revenue of £15.2bn for the 12 months to 27 October, 2024, up from £14.7bn.
Its group like-for-like sales also increased from 1.8 per cent to 4.1 per cent.
Morrisons: ‘Changes are necessary’
Morrisons chief executive Rami 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.
“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.”
Cafes cull follows Sainsbury’s lead
The move comes after City PM reported in January that Sainsbury’s was planning to axe more than 3,000 roles as it prepares to close all its remaining in-store cafes.
The major overhaul will cut two per cent of its current workforce, which stands at 148,000.
The move will also make around 20 per cent of senior management roles at Sainsbury’s redundant.
The drive is part of the supermarket giant’s plans to focus on fewer, bigger roles and to simplify its head office and management teams.
The retailer also said it had decided to close its remaining 61 Sainsbury’s Cafes, subject to consultation.
Supermarket giant ‘on the defensive’
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Morrisons is on the defensive, as trolley wars threaten to break out in the supermarket sector.
“The supermarket chain is closing services seen as nice-to-have, but not essential, and scaling back its convenience footprint as it readies for a round of cost-cutting from rivals.
“It comes after Asda’s new chair Allan Leighton boasted that he had a ‘war chest’ to spend on turning around the struggling grocer.
“At the same time, discounters Aldi and Lidl are already proving to be formidable competition.
“Morrison’s clearly wants to free up cash to be as value-focused as possible as an intense period of competition is forecast.
“It follows a similar move by Sainsbury’s earlier this year, as the grocer refocused on improving its core offerings and closed cafes and more counters to streamline the business.
“Shares in Sainsbury’s as well as listed rivals Tesco and Marks and Spencer are lower on the news.
“They had already lost significant ground, amid expectations that a price war in the aisles may affect profits, especially as it coincides with upcoming payroll increases. For shoppers though, it’ll be welcome relief.
“They had been bracing for further rises to be passed on by the grocers later this year due to their higher tax burdens, so a price war may lighten the load for struggling families, particularly those lower income households, where the weekly shop makes up a significantly greater proportion of their incomes.’’