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Morrisons on "long journey to recovery"

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Following the deal to offload it 140-strong portfolio of convenience stores, Morrisons is to close an additional 11 supermarkets, putting 900 jobs at risk. 

According to Morrisons boss David Potts, who took over from former Chief Exec Philip Daulton in March, the decision hasn’t been made lightly but “one which we cannot see any way through to make those stores viable”.  

It is understood that the closures will mostly be smaller-sized stores but locations are yet to be revealed because managers are still in the process of telling staff.  

Downsizing will cost Britain’s fourth largest supermarket £20m, in addition to the £30m loss the supermarket giant will incur from the sale of the M Local stores and potentially another £20m in rental payment if the stores fail under new ownership. 

In a trading update this morning, Morrisons revealed a near 50% drop in half-year profits but listed six priorities to build on strengths and “improve the customer shopping trip" in efforts to turn it around. Those include: being more competitive; serving customers better; finding local solutions; developing popular and useful services; simplifying and speeding up the organisation making the core supermarkets strong again.  

Progress is supposedly being made on all of these initiatives as part of the big four grocer’s aim to save £1bn.   

Over the last two years Morrisons has lost market share to German discounters Aldi and Lidl, much like its grocer counterparts.  

"It will be a long journey,” added Potts. 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." 

Published on Thursday 10 September by Veebs Sabharwal

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