Morrisons has ‘strong pipeline of new stores’ alongside closures

Morrisons has a strong pipeline of more than 10 new stores planned within the next two to three years, despite reports of closures, it has been claimed.

News emerged this week of three planned closures by the supermarket – in Faversham, Bolton and Preston.

“Following a thorough review of the Faversham and Bolton Breightmet stores we have made the difficult decision to propose to close the stores,” said a Morrisons spokesman.

“We are endeavouring to communicate and execute these changes carefully and thoughtfully with all those affected. In addition, we have agreed to sell our Blackpool Road store in Preston to Tesco. Morrisons customers are well served in Preston with our popular Riversway store nearby.”

The Bolton and Faversham shores are set to close on 17 September. The Preston store is to close before December, when it is expected to open as a Tesco.   

Richard Petyt, who advises Morrisons as a partner at property consultancy Knight Frank, said the closures were “general retailer housekeeping” as part of an estate rotation programme that also included “a new store pipeline for the next two or three years in the double digits”.

He said it was “quite unusual” for a supermarket to sell a store to a competitor, but shared the view that Morrisons’ two Preston supermarkets “overlapped”, leaving it competing with itself in the city.

“They’ve got 500 large stores and there are always going to be some that are performing better than others,” he said. “You’ve got some at the bottom end which aren’t achieving the required returns but at the other end they are opening new stores.

“They’ve got a few in their pipeline that I’m involved in. They’re going to be building a new store in Nuneaton and they’ve got planning permission for Stevenage and for a development down in Peacehaven.

“They have one in Glasgow where they’re redeveloping a smaller store into a bigger one.”

Petyt also highlighted Morrisons supermarkets to have opened this year, in Newcastle and Chelmsford.

“They have a new-store acquisition team and they’re trying to bring new stores forward in locations they think are going to be good. If they’re closing a couple at bottom, that’s the way it goes.”

Morrisons did not comment on the new store plans but confirmed there was a pipeline.

In December, CFO Jo Goff said Morrisons planned to open five supermarkets in 2023, having just completed a £220m sale & leaseback deal for seven warehouses across the UK. The supermarket has been slowly selling some stores on sale & leaseback terms following its £7.1bn debt-fuelled takeover by CD&R in 2021.

Petyt said: “They’re doing a few [sale and leasebacks], but it’s drip feeding. They’re not landing a whole load into the market.”

Morrisons has been losing market share faster than Tesco, Sainsbury’s and Asda in the cost of living crisis, after being overtaken by Aldi in September last year to fall to fifth place in Kantar’s ranking of the UK’s biggest supermarkets. Latest Kantar data put Morrisons share at 8.7% in the 12 weeks to 9 July 2023, down from 9.4% a year earlier. Its sales were up 2.5% in the four weeks to 9 July, compared with total market growth across the grocers of 10.7%.