Morrisons slashes 1,600 more jobs

By Leah Vyse

- Last updated on GMT

Related tags: Safeway, Sainsbury's, Morrisons

Morrisons' planned closure of two distribution depots in the UK is
the latest consequence of the fumbled Safeway takeover.

The closure, which will cause 1,600 job cuts, follows a review of the retailer's distribution network after its chaotic £3 billion (€5.3bn) takeover of Safeway in March 2004.

The UK's fourth largest retailer said that it is closing the sites, both located in southern England, because it was left with too many distribution centres following the Safeway acquisition.

Senior research analyst at Verdict Research, Gavin Rothwell, told FoodandDrinkEurope.com​ in October: "The central problem for Morrisons was its acquisition of Safeway, it was a much bigger task than they anticipated. They didn't really get the handle on the way Safeway was run."

"This was the biggest deal in the sector which makes it a unique case. With an acquisition of this scale there would inevitably be dual running costs for a period."

The group warned that the sites were at risk in September last year, along with a depot in Warrington, Cheshire, which was shut down in December resulting in 700 jobs losses.

The West-Yorkshire based retailer claims it will make every effort to minimise redundancies and has offered to discuss alternative roles for employees within the company.

"We recognise that the current situation is difficult for everyone involved and over the coming weeks we will be continuing to meet and talk with individuals."​ Morrisons said in a statement.

Last month Morrisons was threatened with legal action by the GMB union on the grounds of sexual discrimination. This followed claims by 175 sacked female workers in northern England, that they had received inferior redundancy packages compared to their male colleagues.

Since the Safeway takeover, Morrisons has issued five profit warnings and in October 2005 it recorded its first loss in its 106-year history - posting a £73.7 million pre-tax loss for the first half of the year.

"Morrisons key downfall was the failure to get a handle on what the Safeway customer wants. Safeway's customers are known to be more affluent than the typical Morrisons customer, something that the company failed to address in its stores."​ Rothwell added.

Fellow UK retailer Somerfield has also announced plans today to close two distribution depots resulting 440 job losses.

Related topics: Market Trends

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