Morrisons Debt Climbs to £7.5B Amidst Overhaul and Market Challenges
The UK supermarket's net debt rose in the year to October 2025, reflecting investments and increased lease obligations, as it faces competition from discounters.
Morrisons' net debt has increased to £7.52 billion in the year ending October 2025, according to recent Companies House filings. This rise occurs as the supermarket chain undergoes a significant overhaul aimed at improving its financial standing and attracting more shoppers.
The company's parent, Market Topco, reported that net debt grew from £7.07 billion in the previous year. A Morrisons spokesperson stated that the increase primarily reflects investments in business growth, specifically in its vehicle fleet and the establishment of 39 new stores in the Channel Islands. The supermarket's total lease obligations also saw an increase, rising from £1.75 billion to £1.97 billion over the same period, largely due to investments in its vehicle fleet and the new Channel Islands locations.
Morrisons has been working to implement an aggressive cost-cutting strategy, targeting £1 billion in savings to compete more effectively with discounters. The company also noted that over 80 percent of its supermarket estate remains freehold, and it generated £23 million in profit from sale-and-leaseback transactions during the year.
In the year to October 2025, Morrisons experienced a widening of pre-tax losses from continuing operations before exceptional items, which reached £629 million, up from £612 million in the prior period. This financial performance comes as Morrisons continues to face challenges in the competitive grocery market.
Lidl recently surpassed Morrisons to become Britain's fifth-largest supermarket, holding an 8.7 percent market share compared to Morrisons' 8.4 percent in the three months leading up to June. The supermarket chain has struggled to keep pace with discounters like Aldi and Lidl, while larger competitors such as Sainsbury's and Tesco have managed to increase their market share.
Morrisons has been owned by the U.S. private equity firm Clayton, Dubilier & Rice since its 2021 takeover, a deal that added £6.6 billion in debt to the business. In May, Morrisons announced plans to close approximately 100 loss-making convenience stores, a move that placed hundreds of jobs at risk. At the time, the company cited rising costs, partly attributed to "Government policy," as a factor influencing these decisions.