Nearly 700 Morrisons jobs at risk from new technology

By Michael Stones

- Last updated on GMT

Related tags: Retailing, Morrisons

Morrisons will cut 700 jobs nationwide
Morrisons will cut 700 jobs nationwide
Morrisons has revealed plans to cut up to nearly 700 jobs, as part of plans to introduce cash-counting machines across its 490 stores nationwide.

The retailer said in a statement: “Morrisons is introducing cash-handling systems and technology that will improve the efficiency of cash office operation in its 490 stores.”

The new technology – which will allow cash to be counted automatically – was part of a continuing programme to “ensure that Morrisons continues to improve its competitiveness”.

Morrisons said it had begun consultations with 689 cash office managers and supervisors about a proposal to remove management and supervisory positions in cash offices in stores. 

The Bradford-based supermarket said it would support its colleagues through the consultation process.

Alternative roles

A spokesman for the Union of Shop, Distributive and Allied Workers (Usdaw) said: “Usdaw is in consultations with Morrisons and the union is hopeful that all staff who want to remain with the company will be found alternative roles. Usdaw will be doing everything it can to assist members at this time.”

The nation’s fourth largest retailer was looking to cut costs and improve efficiency even before it revealed a profit fall of 7% to £879M for last year.

Its share of the UK grocery market had dipped to 11.7%​ in the 12 weeks to March 17 compared with 12.3% in the same period of the previous year, according to statistics from retail analyst Kantar Worldpanel.

But the retailer attracted praise from city analyst Shore Capital last month when it advised Sainsbury to follow the cost-cutting lead shown by Morrisons and Tesco. “Sainsbury would do well to follow the lead of Tesco in cutting capital expenditure and Morrisons’ reduction in supermarket openings,”​ said Shore Capital analysts Darren Shirley and Clive Black.

But Morrisons continues to underperform the market, they said. “It appears that it now has sales growth rather than contraction. Morrisons sales in March are said by Nielsen to have risen by 3.1%, some 3% under-performance. Note, however, the magnitude of under-performance relative to all of the grocers increased from 2.0% in February.”

Meanwhile, Shirley and Black described the latest figures revealed in the British Retail Consortium-KPMG retail sales monitor as revealing a “quarter of cautious optimism for retailers”.

‘A little more upbeat’

Overall retail sales for March 2013 were “a little more upbeat that we had expected, following on, as it does, from a strong update in February”,​ they said.

But the growth in online sales was much slower than expected at 6.6% compared with 13.9% in the same period last year.

Looking further ahead, the food market was expected to remain steady.  Supermarket shares were more likely to respond positively to any reductions in capital expenditure – and so more secure dividend flows – than an immediate pick-up in like-for-like volumes, said Shirley and Black.

They added that a warm mid-to-late spring would be a particularly welcome short-term palliatives for supermarkets and clothing retailers alike but cautioned against making “investment recommendations on the weather”.

Jon Copestake, retail analyst at The Economist Intelligence Unit, said Easter sales seemed to have provided a timely boost to an otherwise poor month for British retail.

“The fact that it was the second coldest March on record will not just have kept people away from the high street, but it will also have had a particular effect on clothing retailers looking to launch their spring collections,”​ said Copestake. “However, the slowdown in online sales is surprising, especially given recent reports that the unseasonably cold weather had boosted ecommerce.”

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