Morrisons is planning to close 23 M Local convenience stores after announcing a £792m pre-tax loss for the year to February 1.
The multiple said it would close the under-performing M Local stores and slow new openings “significantly”, although it said it envisaged future growth in the convenience channel.
Over the year Morrisons opened 57 stores and closed six under-performing stores, taking the total to 153 M Local stores. It had originally targeted 100 new store openings a year to take its convenience estate to at least 500 stores within a few years.
Like-for-like sales excluding fuel was down 5.9% over the year, while total turnover was down 4.9% to £16.8bn.
Morrisons chairman Andrew Higginson said: “Last year’s trading environment was tough, and we don’t expect any change this year.
“However, Morrisons is a strong, distinctive business – we own most of our supermarkets, have strong cash flow, and are famous with customers for great quality fresh food at low prices. This gives us a good platform.”
David Gray, retail analyst at Planet Retail, said Morrisons’ “scattergun approach [to convenience] had proved less than ideal compared to the measured roll out of rivals like Little Waitrose”.
“Shelving plans for new M Local convenience stores – for now, at least - while sounding like bad news may ultimately help Morrisons stem the growing profit slide. With outlets yet to deliver a profit and the recent round of closures now largely finalised, clearly something had to give,” he said.