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.
Pressure: 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.
Morrisons is Britain’s fifth-biggest supermarket, with an 8.4 per cent market share, but Lidl is breathing down its neck on 8.3 per cent, according to retail experts Kantar.
Retail expert Jonathan De Mello said Morrisons did not have a distinctive offer.
He said: ‘I think they are a business which is very much in decline and are finding it very hard to maintain market share.
‘They have a real problem with positioning. They want to provide a low-cost solution – but at the same time they can’t compete in the mass market where Tesco and Asda are dominant. They are stuck in the middle.
He said Baitieh, who joined from French food giant Carrefour, was ‘getting to grips with the British market but he hasn’t got there yet’.
A Morrisons spokesman said that its debt now stood at £3.5billion, which was 43 per cent below the level when CD&R bought the business, ‘with financing costs being reduced accordingly’.
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