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Morrisons has announced plans to close 132 McColl’s stores over the year as these stores have “no realistic prospect” of achieving a breakeven position in the medium term, putting around 1,300 McColl’s colleagues at risk of redundancy.
Every affected colleague will be offered alternative employment at a nearby McColl’s store, Morrisons store, logistics operation or foodmaking centre.
Morrisons said that a number of McColl’s stores have been loss-making for some time, and that the business has been constrained by low levels of investment in both the stores and the supply chain. However, some stores will reportedly be able to return to profitability over time.
Of the 132 stores that will close, 55 include a Post Office counter, although Morrisons will delay the closure of these stores until next year to enable them to serve local communities through Christmas.
The news comes as the Competition and Markets Authority (CMA) announced on 27 October that the retailers’ acquisition of McColl’s from administration has been cleared.
Currently, there are 1,164 McColl’s stores trading, 286 of which are Morrisons Daily stores. Morrisons now plans to convert the “substantial” majority of McColl’s stores to Morrisons Dailys. Together with the supermarkets’ franchise business, this will bring the total number of Morrisons Dailys trading within two years to over 1,000.
It is anticipated that all the McColl’s conversions will be completed within the next two to three years.
David Potts, Morrisons chief executive, said: “Today marks an important moment for the McColl’s business, colleagues and customers as we formally welcome the business and its colleagues into the Morrisons family. We are now able to begin the urgent journey to transform McColl’s into a viable, well-invested and growing operation.
“I’m confident that the McColl’s conversions, combined with the increased competitiveness that will be unlocked through investment and synergies, will make Morrisons a growing force in the important convenience market in the years to come.”
Joseph Sutton, Morrisons Convenience, Online and Wholesale director, added: “We very much regret the proposed closure of 132 loss-making stores but it is, very sadly, an important step towards the regeneration of the business.
“We are pleased to be able to offer every colleague alternative employment within the Morrisons group, but we fully recognise that this might not be a practical solution for all colleagues.”
