WM Morrison has slammed the brakes on the roll-out of its convenience store format after slumping to its lowest annual profits in eight years.
Britain's fourth biggest supermarket, whose new chief executive David Potts starts on Monday, said it would be closing 23 of its worst-performing M local stores in the current financial year after the performance of the division fell short of expectations.
Reports suggest 300 staff could go, although Morrisons would not be drawn on numbers or locations because it was involved in talks with those affected. The company has around 60 stores in Scotland.
Morrisons, which currently has 153 M stores, has been criticised for its late entry to the convenience market. It expects the channel to continue to grow in future but said the performance of stores in their second year of trading had not reached the level it had anticipated.
The review follows the announcement from Morrisons in January that it would close 10 of its worst performing stores to save costs. It is targeting savings of £1bn over a three-year period, though no supermarkets will be closed in Scotland.
News of the latest closures came as Morrisons reported a 52 per cent slump in underlying pre-tax profits for the year to February 1 at £345m.
The fall reflects Morrisons' decision to invest £1bn in price cuts as it fights back against discounters Aldi and Lidl, whose keen pricing have allowed them to steal share from the big four supermarkets.
The results show that the company wrote down the value of its property portfolio by £1.27bn as a consequence of market conditions, leading to an overall loss before tax of £792m.
Mr Potts, a former Tesco executive, will bid improve the performance of Morrisons' core stores through lower prices, and better product availability and customer service.
Chairman Andrew Higginson said: "Whilst our broad strategy of saving to invest in our offer is the right one, David will be reviewing the plan to improve trading momentum."
Shares closed up 1.10p at 207.6p.
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