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Morrisons makes more cuts to new store pipeline

Morrisons has announced further cuts to its new store pipeline as it reported a pre-tax loss of £792m in the year to February 2015.

The supermarket retailer said it would open fewer new convenience stores than initially planned in 2015/16.

It will slow the roll-out of its convenience stores “significantly” after opening 57 M Local stores and closing six in 2014/15.

It will also close 23 underperforming convenience stores and review its proposition and site selection criteria.

Morrisons will open just three new full-size supermarkets in the year ahead, compared with 11 in the last year, as it cuts capital expenditure to £400m, from £520m in 2014/15.

It said new space would be negative in the year ahead, after the previously planned closure of 10 underperforming supermarkets and the closure of 23 M Local stores.

The £400m of capital expenditure will include “fewer new convenience store openings than initially planned, with more capital allocated to maintaining and updating the core estate”, Morrisons said in its preliminary results.

It added: “As announced, in future we will only add new core supermarkets to the space pipeline in exceptional circumstances.”

The supermarket’s total turnover in the year to February 2015 was £16.8bn, down 4.9 per cent year on year.

Its underlying profit before tax was down 52 per cent to £345m in 2014/15, compared with £719m in 2013/14, but its overall pre-tax loss was £792m.

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