Morrisons unloads another £200m from its debt trolley

The private equity-owned supermarket chain Wm Morrison has almost halved its hefty debt burden as part of a turnaround effort under its new boss.
Britain’s fifth-largest grocer, which was saddled with debt after its takeover by Clayton, Dubilier & Rice (CD&R) in 2021, said it had paid down a further £200 million of borrowings and extended the maturity of its revolving credit facility to 2030, reducing its overall leverage levels. The restructuring also included extending its term loan facilities from 2027 to 2030.
Morrisons has repaid a total of £2.4 billion of debt since it was bought by CD&R, bringing borrowings down by about 40 per cent from £6.2 billion to £3.8 billion.
• Morrisons posts strongest sales growth since takeover
The Bradford-based company has lagged behind competitors since it was bought by CD&R, an American private equity group. Its share of the grocery market has declined as shoppers turn towards its discounter rivals and Aldi has overtaken it as Britain’s fourth-biggest grocer.
Sir Ken Morrison, who turned Morrisons into a supermarket giant, famously loathed debt and unnecessary expenditure, so much so that he did not bother redecorating the company’s headquarters for more than three decades.
• Supermarket sales at highest level since first lockdown
Morrisons has been undergoing a turnaround under Rami Baitiéh, who joined as chief executive a year ago. The new boss started to invite shoppers to board meetings, held meetings with customers in shops and talked online to its top 100 employees every evening to address customer feedback and complaints. Debts have been reduced and sales and market share have started to improve.
In its latest results, the supermarket chain’s sales nudged up by 2 per cent to almost £4 billion in the three months to July 28.
The credit-rating agency Moody’s recently changed Morrisons’ ratings outlook from “negative” to “stable” on the back of its improved operating performance and upgraded its secured debt to B1 from B2.
• Morrisons’ sales growth slows as market softens
Jo Goff, chief financial officer at Morrisons, said: “Our operational progress is steadily improving as we invest in our colleagues, our prices, our store and logistics estate, our loyalty programme and our fresh food manufacturing operations.
“These investments are a central part of our plans to build a stronger, more competitive and more distinct Morrisons, with traditional values powered by modern retailing practices.”