In a strategic move, Morrisons has announced its intention to close the Rathbones bakery, jeopardising nearly 400 jobs.
Morrisons acquired the Rathbones bakery business in 2005 after its fall into administration. Since then, the company has faced continuous challenges in steering the bakery towards profitability. Despite numerous strategies aimed at revitalising the business, Morrisons has struggled to reverse its loss-making trajectory over several years.
A spokesperson for the supermarket explained, “After a period of growth and investment, the business has been lossmaking for a number of years. Although we have tried several routes to return the business to profitability, none have been successful. This has led us to consider the possibility of closing the site.”
In response to the potential closure, Morrisons has begun a consultation process with 378 staff members affected by this decision. Efforts are being made to explore alternative employment opportunities within the company’s broader operations, aiming to minimise the impact on employees.
Meanwhile, discussions continue on maintaining a smaller, specialised bakery division at the site. This plan could see the continued production of baked breakfast items such as muffins and croissants, potentially saving some jobs.
The proposed closure comes against a backdrop of significant debt restructuring by Morrisons. The supermarket chain has successfully reduced its debt by nearly 40%, from £6.2 billion to £3.8 billion. This financial restructuring included extending existing loan facilities and lowering the overall cost and levels of debt, a clear priority for the supermarket as it navigates current economic challenges.
Importantly, Morrisons confirmed that its 450 in-store Market Street bakeries will remain unaffected by the closure plans, ensuring the continuity of their in-house bakery offerings.
As Morrisons accelerates its strategic initiatives to streamline operations, the closure of Rathbones bakery marks a significant juncture, highlighting the challenges faced by businesses seeking profitability in a competitive market.
