Morrisons to close cafes and axe 350 staff months after boss warned of ‘avalanche of costs’ from Labour’s Budget

MORRISONS is to close much-loved cafes and axe more than 350 staff just months after its boss warned of an “avalanche of costs”; from the Budget.

The supermarket yesterday unleashed a major shake-up to “mitigate recent significant cost increases”;.

It revealed it would be shutting 52 in-store cafes, 35 fish counters, 35 meat counters, 13 florists, 17 convenience stores and all of its 18 Market Kitchens, which sell hot food including pizzas and rotisserie chicken in-store.

Morrisons said 365 jobs would be affected by the “optimisation strategy”;.

The cafe closures will be a particular blow to squeezed families as they run £5 pensioner meal deals and free fruit and breakfast cereals for kids during the holidays.

Chief executive Rami Baitiéh said the company could work with third parties to replace its shuttered in-store cafes, most likely on a franchise basis.

“In most locations the Morrisons cafe has a bright future, but a minority have specific local challenges and in those locations, regrettably, closure and re-allocation of the space is the only sensible option.”;

Three months ago, he told Flying Eze that the Budget would mean price rises and fewer workers.

Mr Baitiéh, pictured with Sir Keir Starmer and Rachel Reeves during last year’s Labour general election campaign, had been lobbying the Government to phase in the new Budget costs, rather than having the burden of higher pay rates, National Insurance and business rates all coming in April.

Morrisons will face an extra £75million in costs from NI changes alone.

The chief executive said: “I asked them, can we not defer some of it or go step by step?”;

But Mr Baitiéh, like other business leaders in the “everyday economy”;, has been given the stark impression that there will not be any concessions by the Chancellor in tomorrow’s Spring Statement.

In January, Sainsbury’s also announced it would close in-store cafes and counters in a move that cut 3,000 jobs.

Supermarkets, which typically have slim profit margins, are having to slash expenditure to face the sudden increase in costs from the Chancellor.

There is also nervousness in the sector after Asda’s new boss, Allan Leighton, launched a “war chest”; to cut prices.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Morrisons is on the defensive and is closing services seen as nice-to-have, but not essential,

“It clearly wants to free- up cash for a period of intense competition.”;

Co-op's Aldi price match

CO-OP is launching an Aldi Price Match on 100 everyday items to boost its cost perceptions with customers.

It comes just weeks after Asda said it had abandoned price matches because they gave discounters “free advertising”;.

Co-op Food boss Matt Hood told Flying Eze: “We found price matches are the best way of resonating with customers that our stores are competitive.”;

The lower prices will only be available to the Co-op’s six million members — like Tesco Clubcard Prices. Milk will be cut from 95p to 85p and free-range eggs from £1.65 to £1.45.

Mr Hood said the chain is trying to help shoppers because extra business costs mean food inflation will likely “be higher”; than 5 per cent by the end of the year.

DNA data of Brits ‘on sale'

SOME DNA data is now up for sale after a genetic testing firm, 23AandMe, filed for bankruptcy yesterday.

The Californian company, founded in 2006, has sold more than 12million DNA saliva testing kits via post, including at least 250,000 in the UK.

They helped people to find out about their ancestry.

Now the firm, and its data, is up for sale as part of the bankruptcy process after posting a near £100million loss last year.

Chairman Mark Jensen said it was “committed”; to safeguarding customer details.

However, consumers have been urged to delete their data from the service after a breach two years ago.

Founder and chief exec Anne Wojcicki had tried three times to buy the business, which had collapsed in value.

She has now resigned from the board but said she would continue to pursue the company as an independent bidder.

Services boost to economy

CHANCELLOR Rachel Reeves has received a much-needed boost before tomorrow’s Spring Statement, as an economic survey showed the private sector grew faster than expected.

Standard & Poor’s purchasing managers index showed a six-month high in March, helped by unexpectedly strong growth in the service sector — including pubs, restaurants and travel firms.

The PMI registered 52, up from 50.5 in February and the highest since last September.

But the manufacturing sector, which is more exposed to the threat of US tariffs, was much more downbeat.

The PMI showed factory owners reporting the weakest degree of confidence since November 2022 and flagging a sharp downturn in production.

The index also showed firms were reacting to mounting cost increases with restructuring, automation and not replacing staff who have left.

HOUSE price growth slowed to 1.8 per cent in February from 1.9 per cent in January after a jump in the number of properties on the market, according to Zoopla.

The average price for a UK home is now £267,500 — £4,750 higher than a year ago.