UK Grocer Morrisons Plans to Close 100 Stores

Britain's fifth-largest supermarket chain announced on 21 May 2026 that it will close roughly 100 company-owned Morrisons Daily convenience stores over the coming months, putting hundreds of jobs at risk and intensifying scrutiny of the private-equity ownership model that has reshaped the grocer since 2021 [1][2].

The closures form one part of a wider restructuring programme that also eliminates 52 in-store cafés, 18 Market Kitchen counters, 13 florist concessions, 35 meat counters, 35 fish counters, and 4 pharmacies — 145 affected locations in total [3][4]. Formal consultation with staff began immediately.

Morrisons described the targeted stores as "the most challenged" in its estate, having been "loss-making for several years despite remedial action." The company blamed the situation on a combination of structural underperformance and "significant cost increases resulting from government policy choices" [1].

What Is Closing — and Why These Stores

Every one of the 100 Daily stores marked for closure is a former McColl's site. Morrisons acquired the McColl's chain out of administration in 2022 for £190 million, inheriting 1,164 shops [1][5]. By September 2024, all had been rebranded under the Morrisons Daily banner. But many of the locations — small-format convenience stores, typically between 1,500 and 3,000 square feet — never achieved profitability.

The closures do not affect Morrisons' core estate of approximately 500 full-size supermarkets. The company said it remains committed to the convenience format but will pivot future growth toward franchise partnerships rather than company-owned stores, a model that shifts operational risk and fixed costs to franchisees [1][3].

This is a significant distinction. Morrisons is not retreating from convenience retailing; it is retreating from owning convenience stores outright. The franchise model allows expansion without the capital expenditure and staffing costs that made the McColl's portfolio a drag on the group balance sheet.

The Debt Question: CD&R's Leveraged Buyout

To understand why Morrisons has less room to tolerate underperforming stores than its competitors, the starting point is the £7 billion leveraged buyout by Clayton, Dubilier & Rice in October 2021 [6]. That deal, which valued the enterprise at roughly £10 billion, was the UK's largest LBO in over a decade.

Source: Morrisons Corporate Filings

Data as of Oct 31, 2025CSV

Net debt nearly doubled after the acquisition, peaking at approximately £5.7 billion in 2022 before being reduced through aggressive asset sales — most notably the disposal of 337 petrol forecourts to Motor Fuel Group for £2.5 billion in April 2024 [7][8]. MFG is also owned by CD&R, and Morrisons took a 20% stake in MFG as part of the transaction. That related-party element drew criticism from analysts and unions who questioned whether the deal served Morrisons' interests or its private-equity parent's portfolio strategy [9].

As of October 2025, net debt stood at £3.1 billion — down 46% from its peak but still generating an annual interest bill of £281 million [10]. That interest burden is the primary reason Morrisons reports net losses despite being operationally profitable. For the fiscal year ending October 2025, the company recorded a pre-tax loss of £381 million, slightly improved from the £414 million loss the prior year [10][11].

Source: Morrisons Corporate Filings

Data as of Oct 31, 2025CSV

Underlying EBITDA — a measure of operating profit before interest, tax, depreciation, and amortisation — was £835 million for FY 2024/25, flat year-on-year [10]. The company is generating cash from operations. But more than a third of that operating profit is consumed by debt service. Moody's has downgraded its outlook for Morrisons from "stable" to "negative" [6].

The Government Cost Argument

Morrisons was explicit in pointing to Labour's policy changes as an accelerant. The increase in employer National Insurance contributions and rises to the National Living Wage added an estimated £200 million in annual costs to the business, according to CEO Rami Baitieh [12][1].

That figure is substantial — equivalent to roughly a quarter of the company's EBITDA. For stores already operating at a loss, the additional wage and tax burden made continued operation untenable, the company argued.

Critics, including Labour-aligned commentators, have pushed back on the framing. The targeted stores were loss-making before the NIC increase took effect. The government policy changes may have accelerated the timeline for closures, but they did not create the underlying problem of an unprofitable convenience estate inherited from a failed chain [12].

Morrisons' own cost-reduction programme delivered £233 million in savings during FY 2024/25, roughly offsetting the policy cost increases [10]. The question is whether management would have tolerated the losses longer without the debt overhang from the LBO — and whether a publicly listed Morrisons, unburdened by £281 million in annual interest payments, would have had greater capacity to invest in turning these stores around rather than closing them.

Jobs at Risk: Scale and Legal Obligations

Hundreds of roles are directly at risk from the 100 Daily store closures. Across the broader restructuring — including cafés, counters, and other in-store services — approximately 365 positions face redundancy [3][4].

This is the third significant round of job cuts at Morrisons in 2026 alone. In April, the company eliminated roughly 8% of headquarters staff at its Hilmore House offices — more than 200 roles — as part of an AI-driven operational overhaul [13]. The earlier rounds of café and counter closures had already reduced headcount.

Under UK employment law (the Trade Union and Labour Relations (Consolidation) Act 1992), employers proposing 100 or more redundancies at a single establishment must provide at least 45 days' advance notice and engage in formal consultation with employee representatives [4]. Morrisons has initiated this process.

The company has committed to "look to find roles for the impacted colleagues elsewhere within its supermarkets or manufacturing business where possible" [1]. But for employees in locations where no alternative Morrisons site is within commuting distance, redundancy is the likely outcome. Given that many of the affected stores are in smaller towns and suburban areas, redeployment options may be limited.

Which Communities Lose Out

The closures are spread across the UK, but certain regions face disproportionate impact.

Scotland has been described as particularly affected, with stores in Peebles, Stewarton, Bathgate, Stirling, and multiple Glasgow suburbs among those closing [14][15]. Many of these are smaller communities where a convenience store serves as the primary local food retailer.

Northern England, including multiple locations across Yorkshire — Morrisons' historic heartland — is also heavily affected, particularly through the closure of in-store services like cafés and counters [16].

London and the South East see closures in Selsdon, Wood Green, Wokingham, Shenfield, and Woking, among others [14][15]. Four in-store pharmacies are closing: in Birmingham (Small Heath), Blackburn, Bradford, and Wood Green [14].

The pharmacy closures warrant particular attention. In areas where a Morrisons pharmacy is the most accessible dispensing service, the loss creates a gap that the NHS must address through alternative provision — a process that can take months.

No formal assessment by the Competition and Markets Authority or local authorities regarding food-access implications has been publicly disclosed [15]. The CMA's mandate typically covers mergers and acquisitions rather than store closure programmes. There is no legal obligation on Morrisons to maintain a store in any given location, regardless of whether it is the only full-service grocer in the area. The responsibility, if any, falls to local councils and planning authorities — bodies with limited tools to compel a private company to continue operating a loss-making site.

Market Share: Morrisons in Freefall

The closures arrive as Morrisons' competitive position continues to erode. The grocer now holds approximately 8.3% of the UK grocery market, according to Kantar data for the 12 weeks to 22 March 2026 [17][18]. That puts it level with Lidl and behind Aldi, which overtook Morrisons to become the UK's fourth-largest grocer with 10.2% market share.

Source: Kantar Worldpanel

Data as of Mar 22, 2026CSV

The shift is stark. As recently as 2017, the traditional "Big Four" — Tesco, Sainsbury's, Asda, and Morrisons — collectively held around 73% of the market. That figure has fallen to roughly 65%, with Aldi and Lidl's combined share rising from about 10% to 18.3% over the same period [17][19].

Tesco, at 27.3%, remains dominant and has shown the most resilience to discounter competition through its Clubcard loyalty programme and Aldi Price Match campaign. Sainsbury's holds 15.1%, and Asda — itself subject to a leveraged buyout by the Issa brothers and TDR Capital — sits at 13.7% and has faced its own operational difficulties [17].

Morrisons' challenge is that it is losing share to both the discounters below and the larger incumbents above. Its supermarket estate, concentrated in Northern England, lacks the geographic breadth of Tesco or Sainsbury's. Its convenience operation, now being cut back, was meant to address that gap.

Strategic Reset or Balance-Sheet Triage?

CEO Rami Baitieh, who joined Morrisons in late 2023 from Carrefour, has articulated a seven-point turnaround plan centred on "simplification, modernisation and mobilisation" [20]. The convenience store closures fit within the simplification pillar — exiting sites that were never going to earn a return on capital.

Defenders of the strategy argue that this is rational portfolio management. The McColl's acquisition brought stores that had already failed under their previous owner. Closing the weakest 100 out of more than 1,100 is not retreat but discipline. The franchise pivot allows Morrisons to maintain brand presence without the overhead [1][20].

The counterargument is one of sequence and context. Morrisons has now sold its petrol forecourts, cut headquarters staff, closed cafés and counters, and is shutting 100 stores — all within 18 months. The pace and breadth of asset disposals and cost-cutting resemble a company managing a debt crisis, not executing a growth strategy. The £381 million pre-tax loss, the £281 million interest bill, and the Moody's downgrade reinforce that reading [10][6].

The truth likely sits between these positions. The stores being closed are genuinely loss-making, and the government policy costs are real. But the tolerance threshold for losses is set by the debt load. A company paying £281 million a year in interest has a fundamentally different relationship with underperforming assets than one that does not. The LBO did not create the problem, but it removed the buffer that might have allowed a more gradual resolution.

What Comes Next

Morrisons' remaining estate of roughly 500 supermarkets and more than 1,000 franchise and company-owned convenience stores still makes it a major presence in UK food retail. The company's vertically integrated supply chain — it owns abattoirs, bakeries, and produce-packing facilities — remains a competitive advantage that discounters cannot easily replicate [20].

But the trajectory raises questions that extend beyond Morrisons. The UK grocery sector has now seen two of the former Big Four — Morrisons and Asda — taken private through leveraged buyouts and subsequently undergo significant restructuring. In both cases, debt service has constrained investment and accelerated store closures.

The communities affected by these closures — particularly in Scotland, Northern England, and smaller towns — face practical consequences. Elderly and less mobile residents who relied on a Morrisons Daily within walking distance must now travel further or depend on delivery services. The loss of in-store pharmacies compounds the problem.

For the roughly 365 employees facing potential redundancy, the formal consultation process offers some protection. But the outcome for many will be job loss in areas where alternative retail employment is scarce.

The 45-day consultation period will determine final closure numbers and severance terms. CD&R, which has not publicly commented on the closures, continues to hold Morrisons as a portfolio company with no announced timeline for an exit — whether through a re-listing on the London Stock Exchange or a sale to another buyer.

Whether Morrisons emerges from this restructuring as a leaner, more focused competitor or continues its slide toward irrelevance in a market dominated by Tesco and the German discounters will depend on whether the remaining stores can generate enough profit to both service the debt and fund the investment the business needs. The numbers suggest that margin is thin.