Morrisons is planning to close 100 convenience stores over the coming months, putting hundreds of jobs at risk, citing rising costs linked to government policy.

The supermarket said the affected Morrisons Daily stores had been loss-making for some time and were originally acquired as part of its £190m rescue deal for McColl’s in 2022.

It said the stores’ performance had been “challenged for a number of years” despite efforts to improve trading.

However, it added that the situation had been made worse by “significant cost increases resulting from government policy choices”, including rises to the national living wage and employer National Insurance contributions.

Morrisons said it was proposing to take the “tough but necessary decision” to close the stores, with a consultation set to begin shortly.

The retailer has not confirmed how many jobs are at risk, although it is understood hundreds of staff could be affected.

A Morrisons spokesperson said the business would look to find alternative roles for employees impacted by the closures where possible.

The closures come after Morrisons said last year it would shut 52 cafés and 17 convenience stores. Last month, the grocer also revealed that around 200 roles were at risk at its Bradford head office.

Morrisons currently operates around 1,700 Morrisons Daily convenience stores and opened more than 120 franchise stores last year.

The supermarket has not yet named the stores earmarked for closure, but said the affected sites were spread across the UK.

Despite the planned closures, Morrisons said it still had a “robust expansion plan” for 2026 and saw scope to open hundreds more franchise stores over the coming years.

A government spokesperson said the closures were a commercial decision for Morrisons.

“We understand that this is a concerning time for workers and their families,” they said.

“A broad range of support is available for those affected. Acas can also provide employees and employers with free, impartial advice on workplace rights, rules and best practice.”

Food and drink businesses are facing new costs under the government’s Extended Producer Responsibility programme, which charges companies for the cost to councils of recycling some product packaging.

The pressure comes as food inflation continues to run ahead of the Bank of England’s two per cent target. New figures show annual food price inflation reached 3 per cent in April, above the overall inflation rate of 2.8 per cent.

Retailers have also warned that food inflation could rise further this year amid global disruption and higher supply chain costs.

This week, supermarket sources said the government had asked grocers to consider voluntarily freezing prices on key food items in exchange for easing regulation.

However, the proposal sparked a backlash from industry figures.

Former Sainsbury’s boss Justin King said the UK supermarket sector was already highly competitive and accused the Treasury of being “hypocritical” for asking supermarkets to cap prices while government policy was adding to inflation.