Morrisons says it is to shut "loss-making" convenience stores, placing hundreds of jobs at risk.
It is understood just over 100 Morrisons Daily sites will go under the plans. The company said they had been struggling for years.
Its statement blamed "significant cost increases resulting from Government policy choices" for tipping them over the edge.
Morrisons said Labour's budget choices had made efforts to return the stores to profitability "even more difficult".
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The supermarket chain has around 1,700 convenience stores and employs around 95,000 staff. In recent times, it has moved to grow a franchise model that is still expanding.
Bosses said a consultation with the staff affected has begun, and workers would be provided with the "necessary support" and be offered roles in the wider business, where able.
"The performance of all company-owned stores across our Convenience business is subject to continuous review," the statement said.
"This process has identified a number of stores, which were part of the McColl's acquisition, whose performance has been challenged for a number of years and which are loss making, despite remedial action."
Rising policy costs, such as through the minimum wage and employer national insurance contributions, have been widely criticised by the grocery sector.
It is under pressure from the government to cut prices to help struggling families amid renewed cost of living pressures caused by the war in the Middle East.
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The industry baulked at suggestions of price caps for essentials this week before the chancellor revealed suspensions of some food tariffs and ordered supermarket bosses to pass the cuts on.
The announcement by Morrisons marked the third round of job losses at the chain this year.
Last month, Morrisons told staff it was launching a consultation over job cuts at its head office in Bradford, impacting less than 10% of jobs at the site.
The retailer has also recently shut some of its cafes, convenience stores, florists and fresh food counters as part of a shake-up which led to the loss of hundreds of jobs.
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