Morrisons to Close 100 Stores as UK Retail Sector Faces Mounting Pressures

Morrisons is planning to close 100 stores over the coming months, according to a BBC Business report^[1] published on 22 May 2026. The supermarket chain blamed government policy choices for rising costs that have made these convenience stores unprofitable.

The closures affect stores acquired through Morrisons' McColls acquisition in 2022, which the company says have been loss-making for some time^[1]. Hundreds of jobs are understood to be at risk, though Morrisons has not confirmed exact numbers.

Rising Costs Drive Closure Decision

Morrisons specifically cited "significant cost increases resulting from government policy choices" including increases to the national living wage and National Insurance contributions^[1]. The company described the decision as "tough but necessary" and said a consultation with affected staff would begin shortly.

The affected stores are described as ones "whose performance has been challenged for a number of years and which are loss making, despite remedial action"^[1]. The closures will take place across the UK, though specific locations have not been announced.

This latest round of closures follows Morrisons' announcement last year that it was closing 52 cafes and 17 convenience stores. The company also revealed last month that about 200 jobs were at risk at its Bradford headquarters^[1].

Retail Sector Under Pressure

The Morrisons announcement comes against a backdrop of challenging conditions across the UK retail sector. According to CompanyPulse's company register^[2], there are 203,294 companies registered under SIC code 47910 (retail sale via mail order houses or via Internet), representing a significant portion of the UK's retail landscape.

Recent insolvency data from CompanyPulse reveals the scale of distress in the sector. The database shows 109,535 companies currently in liquidation, with 5,062 in administration, 3,720 in voluntary arrangements, and 590 in receivership^[2]. While these figures cover all sectors, they indicate the broader economic pressures facing UK businesses.

The retail sector's challenges are compounded by broader economic conditions. UK public sector borrowing in April hit £24.3bn, the highest total for April since the Covid pandemic in 2020, according to data from the Office for National Statistics^[3]. Retail sales volumes fell in April by the fastest pace for almost a year, after the jump in petrol prices hit demand for fuel^[3].

Regional Distribution of Retail Businesses

CompanyPulse data reveals the geographic concentration of UK businesses, with London hosting 1,060,299 registered companies, followed by Manchester with 102,854 and Birmingham with 93,082^[2]. These urban centres, which typically have high concentrations of retail businesses, may feel the impact of sector-wide pressures more acutely.

Despite the closures, Morrisons maintains it has a "robust expansion plan" for 2026 and sees opportunities to open hundreds more franchise stores in coming years^[1]. The chain currently operates around 1,700 Morrisons Daily convenience stores and opened more than 120 franchise stores last year^[1].

Government Response and Outlook

A government spokesperson responded to the Morrisons announcement by stating it was a commercial decision for the company, while acknowledging it was "a concerning time for workers and their families"^[1]. The spokesperson noted that support is available for affected workers through services like Acas.

Many retailers have argued they have been hit with a wave of extra costs since April last year, including increased employer National Insurance contributions and higher minimum wages^[1]. Food and drink companies are now also charged for the cost to councils of recycling packaging under the government's Extended Producer Responsibility scheme.

The Morrisons closures represent the latest in a series of challenges facing the UK retail sector. With economic headwinds intensifying - Ruth Gregory, deputy chief UK economist at Capital Economics, notes the figures "highlight the deteriorating growth outlook and fragile fiscal backdrop"^[3] - retailers face difficult decisions about their store portfolios and cost structures in the months ahead.