Morrisons Plans to Shut 100 Convenience Stores Amid Rising Cost Pressures

BBC Business reported Friday that UK supermarket chain Morrisons intends to shut around 100 convenience stores within the next several months. The chain pointed directly to government policy decisions as a major driver of the cost increases making those locations unviable.

Loss-Making Sites Inherited From McColls Deal

The stores earmarked for closure sit within Morrisons’ Daily convenience network. Most were absorbed into the business through its 2022 purchase of the McColls convenience chain. Morrisons said these specific locations had been underperforming for several years. Remedial measures failed to turn them around. The company did not immediately name which stores would be affected, but confirmed a staff consultation would begin shortly. The number of jobs at risk has not been disclosed.

The closures follow a difficult recent stretch for the supermarket. Last year the chain moved to shut 52 in-store cafes and 17 convenience outlets. Earlier this year it disclosed that around 200 roles at its Bradford headquarters were under threat.

Government Costs and the Broader Retail Squeeze

Morrisons joins a chorus of major UK retailers arguing that a wave of policy-driven expenses has squeezed margins sharply since April last year. Higher employer National Insurance contributions and an elevated minimum wage floor have added material costs across the sector. On top of that, the government’s Extended Producer Responsibility programme now charges food and drink producers for the recycling costs of their packaging, passing further expense down the supply chain.

Food price inflation is running at 3% annually as of April, above the UK’s overall inflation rate of 2.8%. Some industry forecasters warn food inflation could reach 10% by year-end, partly due to geopolitical disruption affecting supply chains.

Price Freeze Proposal Draws Industry Fury

The closures arrive against a tense backdrop between government and grocery retailers. Multiple supermarket sources told BBC Business this week that officials had encouraged chains to voluntarily cap prices on key staples in exchange for regulatory relief. The proposal drew a sharp rebuke from senior industry figures. Former Sainsbury’s chief Justin King called it hypocritical for the Treasury to pressure supermarkets on pricing while its own policy agenda was contributing to inflationary conditions.

Despite the cuts, Morrisons struck a forward-looking tone on its franchise network. The company said it has a firm expansion plan for 2026 and sees scope to open hundreds of new franchise locations in the years ahead.

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