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Morrisons to close 11 stores and sell 140 M locals

Morrisons is to close 11 stores putting around 900 jobs at risk, following a 47% fall in profits for the half year to 2 August 2015.

Total turnover was down by 5.1% to £8.1bn year-on-year. Pre-tax profit fell to £126m compared with £239m for the same period last year.

Chief executive David Potts said: “The immediate priority is to deliver a better shopping trip to stabilise trading performance. Our six strategic priorities will then deliver improvement in the core supermarkets, where we have the greatest opportunity.

“It will be a long journey. We approach the challenge with energy, confidence and many strengths, particularly our strong balance sheet and cash flow, which enables investment in improving the customer shopping trip,” he added.

Looking ahead the company said: “Customers and colleagues are beginning to notice improvements, but the turnaround will take time and require sustained investment in the proposition.”

It also said it expects underlying profit before tax to be higher in the second half of 2015/16 than the first.

Yesterday (9 September) Morrisons announced that it is selling 140 M local convenience stores for around £25m in cash, to a team led by retail entrepreneur Mike Greene and backed by Greybull Capital LLP.

It will keep five M local stores, which are either on forecourts or will be converted to small Morrisons supermarkets.

The move follows a review of the M local business in March this year which concluded that M local would have required significant further investment in new sites, plus additional capital expenditure and lease commitments, to reach profitability.

 

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