Morrisons to axe hundreds of jobs and shuts cafes to relieve debt pressures

Morrisons is readying to axe hundreds of jobs and unopen dozens of cafes amid a propulsion to antagonistic indebtedness pressures and rising unit costs.

The supermarket said it was proposing the closure of immoderate cafes, in-store butcher and food counters arsenic good arsenic smaller convenience stores crossed its estate, putting 365 workers astatine hazard of redundancy.

Some florists and pharmacies volition besides beryllium targetted successful the cost-cutting drive.

Rami Baitiéh, the Morrisons main executive, said the changes were a “necessary portion of our plans to renew and reinvigorate Morrisons”.

He added they would let Morrisons to “focus our concern into the areas that customers truly worth and that tin play a afloat portion successful our growth”.

It comes conscionable days earlier Morrisons is owed to merchandise its latest trading update for the archetypal 3 months of the fiscal year.

The institution has been battling precocious indebtedness costs since its takeover by Clayton, Dubilier & Rice (CD&R) for £10bn successful 2021. In October 2021, its indebtedness heap had rocketed to £6.2bn.

For years, the precocious indebtedness levels person meant Morrisons has had to wage retired hundreds of millions of pounds successful indebtedness involvement payments.

In its latest fiscal year, precocious indebtedness concern costs meant it recorded a pre-tax nonaccomplishment of astir £500m. In the 16 weeks to the extremity of July alone, it was struck by a £110m indebtedness concern bill.

Morrisons has been racing to slash this indebtedness heap since Mr Baitiéh took the helm successful 2023, and past October announced a £331m woody to merchantability crushed leases connected 76 supermarkets.

In November, it announced a large restructuring to trim its indebtedness heap to astir £3.8bn.

However, successful January, Mr Baitiéh warned that the institution was facing caller headwinds to its turnaround efforts.

He said Rachel Reeves’s taxation raid would unit it to velocity up a outgo cutting drive, with the National Insurance costing it £85m alone.

Mr Baitiéh said: “These further costs successful the Budget were unwelcome, unexpected.”

Under the shake-up announced connected Monday, Morrisons said it was readying to unopen 52 cafes, 18 of its takeaway nutrient stations known arsenic Market Kitchens, 17 convenience stores, 13 florists, 35 nutrient counters, 35 food counters and 4 pharmacies.

While the important bulk of unit are expected to beryllium redeployed elsewhere successful Morrisons, the institution said astir 365 workers are astatine hazard of redundancy.

Morrisons said the changes came aft a “wide-ranging review” which flagged areas wherever the costs were excessively precocious for however overmuch customers were utilizing them.

It said the determination to adjacent parts of its stores would assistance “mitigate caller important outgo increases”.

Broaden your horizons with award-winning British journalism. Try The Telegraph escaped for 1 period with unlimited entree to our award-winning website, exclusive app, money-saving offers and more.