Morrisons has stated that approximately 1,300 McColl’s employees face redundancy as a result of plans to close 132 loss-making stores at the convenience store chain it acquired this year.
In May, the supermarket giant reached an agreement to purchase its troubled competitor for £190 million in a rescue deal.
Morrisons unveiled plans to revamp the convenience store on Tuesday, after competition regulators indicated last week that they would approve the takeover.
Morrisons stated that it expects some McColl’s stores to return to profitability as part of its turnaround plans, but emphasized that “132 stores have no realistic chance of reaching breakeven in the medium term.”
Morrisons, headquartered in Bradford and acquired in a £7 billion deal last year, stated that all 1,300 employees whose jobs are threatened by the closure plans will be offered positions elsewhere within the company.
The supermarket chain reported that 55 of the 132 stores slated for closure have Post Office counters and will therefore close the following year after the busy holiday season.
Morrisons will convert McColl’s stores to its own Morrisons Daily brand as part of the rebranding effort.
As a result of a previous partnership, 286 of the 1,164 McColl’s stores currently operating are already branded as Morrisons Daily.
Following a review, Morrisons announced plans to convert the “vast majority” of stores to Morrisons Dailys, bringing the total number of stores under the banner to over 1,000 within two years.
David Potts, chief executive officer of Morrisons, stated, ‘Today is a significant day for the McColl’s business, employees, and customers, as we officially welcome the company and its employees into the Morrisons family.
We are now able to begin the urgent transformation of McColl’s into a viable, well-funded, and expanding enterprise.
There is no doubt that McColl’s is a business with great potential, according to Joseph Sutton, director of Morrisons’ convenience, online, and wholesale divisions.
I am confident that the combination of McColl’s conveniently located stores and outstanding employees with Morrisons’ scale, brand, systems, and fresh food expertise will result in a business transformation.
“We deeply regret the proposed closure of 132 loss-making stores, but it is a necessary step for the business’s revitalization.”
I am confident that, as part of the Morrisons family, McColl’s can once again become a growing, thriving, and vibrant convenience business serving local communities throughout the United Kingdom.
In May, Morrisons and the Issa brothers’ EG Group, which owns Asda, engaged in a fierce competition to acquire the McColl’s outlets.
Morrisons’ initial proposal to assume McColl’s debts and repay them gradually was rejected by the company’s creditors.
The proposal from Morrisons, McColl’s sole supplier, would have safeguarded the “great majority” of employees and stores, as well as its £141 million pension plan.
However, Morrisons returned three days later with a revised proposal that would see the lenders repaid in full and immediately, so achieving one of their primary criteria, although the specifics are unknown.