Labour’s mounting pressure on Britain’s supermarkets has been blamed for a fresh wave of store closures after Morrisons confirmed plans to shut around 100 loss making convenience shops, putting hundreds of jobs at risk.
The Bradford based grocer said the closures were a “tough but necessary” response to soaring operating costs, many of which supermarket bosses say have been driven by Labour’s tax and regulatory agenda. The affected sites are mainly former McColl’s stores that Morrisons acquired and converted into Morrisons Daily branches following the collapse of the convenience chain in 2022.
Morrisons said government policy had made it increasingly difficult for struggling stores to return to profitability. In a sharply worded statement, the retailer pointed to “significant cost increases resulting from government policy choices”, echoing earlier warnings from chief executive Rami Baitieh about an “avalanche of costs” hitting the supermarket sector.
The closures will take place over the coming months, with staff now entering consultation. Morrisons said it would attempt to redeploy workers where possible into other supermarket, logistics and manufacturing roles.
The decision represents another damaging blow for Britain’s high streets and raises fresh questions about Labour’s economic strategy. Since entering government, ministers have faced mounting criticism from retailers over rising employer National Insurance contributions, higher wage costs, environmental levies and escalating energy expenses.
Supermarket executives have become increasingly outspoken in their criticism. Allan Leighton, the executive chairman of Asda, warned earlier this year that dealing with the Government had become “more and more difficult”. Meanwhile, Stuart Machin, the boss of Marks & Spencer, accused ministers of making business costs unsustainable after energy levies surged.
Machin also attacked Labour’s reported interest in food price controls, branding the idea “completely preposterous” and warning that politicians should not attempt to “run business”.
The Morrisons closures come as the supermarket battles a worsening competitive position. Industry data from Worldpanel by Numerator shows Morrisons now tied with German discounter Lidl on 8.4 per cent of the UK grocery market, a dramatic decline from Morrisons’ position several years ago. Lidl’s rapid expansion has intensified pressure on traditional supermarkets already struggling with inflation and rising costs.
Analysts note that Morrisons’ difficulties were compounded by its £10 billion private equity takeover by Clayton, Dubilier & Rice in 2021, which left the retailer carrying a heavy debt burden and substantial interest payments.
The supermarket has already embarked on sweeping cost cutting measures. Earlier this year, Morrisons announced plans to cut around 100 office roles as part of a restructuring programme. It has also reduced services in stores by closing cafés, meat counters and fish counters in a bid to save money.
Retail experts warn that the latest closures could be the start of a wider retrenchment across the grocery sector if costs continue rising. Supermarkets are facing mounting pressure from higher wages, energy bills and taxation at a time when shoppers are already squeezed by inflation and slowing economic growth.
While ministers insist their policies are designed to protect workers and consumers, critics argue Labour is creating an increasingly hostile environment for major employers. For communities facing the loss of local shops and jobs, Morrisons’ retreat will likely be viewed as further evidence that Britain’s retail sector is buckling under the weight of rising government imposed costs.
