UK hypermarket Morrisons lost almost £600million last year as pressure mounts on the debt-laden supermarket chain that one retail expert has described as ‘very much in decline’.
The private equity-owned grocer is being squeezed by discounters Aldi and Lidl on the one hand, and market leader Tesco on the other. It lost £592million on ‘continuing operations’ – including groceries and food manufacturing – in the year to October, down from £974million in 2023. Sales nudged up to £15.3billion from £14.7billion.
The figures exclude a one-off gain of £2.6billion made on the sale of Morrisons’ petrol forecourt unit that was mainly used to pay down debt, which stood at £6billion at the end of the year, down from £7billion in 2023. Morrisons was saddled with huge borrowings after it was acquired by US buyout group Clayton, Dubilier and Rice (CD&R) in 2021.
Morrisons is being squeezed by discounters Aldi and Lidl on the one hand, and market leader Tesco on the other. The cost of servicing that debt soared as interest rates rocketed following Russia’s invasion of Ukraine a year later. Finance costs last year totalled £699million, which was slightly down from £730million the previous year.
Last night experts said the windfall from the petrol stations’ sale to Motor Fuels Group ‘flatters the numbers’ and warned the chain ‘can’t maintain the status quo’ and needs ‘root and branch reform’ to take on discount rivals. Chief executive Rami Baitieh has tried to turn it around by axing 3,600 staff, following 8,800 job losses in 2023.
The cost-cutting continues with the closure of 52 cafes, 17 convenience stores, all 18 Market Kitchens, 13 florists, 35 meat counters, 35 fish counters and four pharmacies.Last month, Alimentation Couche-Tard (ACT) withdrew its proposal to acquire Seven & i Holdings, citing “a lack of constructive engagement by Seven & i.” Now, in a presentation earlier this week, the Japanese retailer laid out a transformation plan moving forward.
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