Morrisons debt hit a new high this year, raising fresh questions about whether the former big‑four grocer can reclaim its standing.
Debt load climbs despite cost cuts
Net debt rose to £7.5 billion for the year to October, up from £7.1 billion a year earlier. The increase follows the 2021 £7 billion buy‑out by private‑equity firm Clayton Dubilier & Rice. Management says it trimmed the figure by roughly 46 percent since the new chief executive arrived, yet the balance sheet remains strained.
To curb the burden, the retailer is weighing a £1 billion sale of freehold rights to its stores, planning to lease back the premises.
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Earlier this month, sales rose 2.8 percent, but a pre‑tax loss of £629 million was recorded. The loss reflects a write‑down on the McColl’s convenience chain acquired for £190 million in 2022, and a ransomware attack on the tech provider that disrupted food supplies.
Operational changes and workforce cuts
The company shed nearly 5,000 jobs, bringing the average monthly workforce to 96,232, a five‑percent decline year‑on‑year. The reductions stem from ending newspaper home delivery, restructuring retail staff, and scaling down the Rathbones bakery operation.
A spokesperson clarified that no additional redundancies occurred in stores; staff numbers fell only as vacancies were not refilled.
In an effort to boost market share, the grocer opened 30 new “Daily” convenience outlets and plans to add hundreds more. This move pits it against rivals expanding in the same segment, such as Asda’s trial partnership with independent corner shops.
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One retail commentator described the situation as “nothing but difficult,” noting that cost‑cutting has reached its limits and is already affecting store standards and product availability.
Future outlook and strategic options
The supermarket is considering further property sales to generate cash, but the resulting lease obligations could increase long‑term costs.
For now, the grocer’s resilience against external pressures—such as the cyber incident, rising inflation, and government‑driven cost increases—has been highlighted by its spokesperson. Whether that resilience can translate into a sustainable return to big‑four status remains an open question.