Morrisons sees loss of £1.5bn two years after CD&R private equity buyout

Morrisons has made a loss of over £1.5 billion since US firm Clayton, Dubilier and Rice (CD&R) bought private equity in the supermarket two years ago.

According to newly released documents on Companies House, the supermarket chain was bought by CD&R two years ago for £7 billion but was hit with significant losses of £1.5 billion in the year after the buyout.

As a result, Morrisons took on a £6.1 billion debt and has been hammered by large interest repayments, accounting for £400m of the drop in overall losses.

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In the year prior to the takeover, Morrisons was in Britain’s ‘big four’ supermarkets, and reported a £201 million annual profit, but a year later to October 2022 it had made significant losses.

Morrisons then lost its place in the ‘big four’ last September, when it was overtaken by fast-growing German discounter Aldi.

A likely reason for this is because the retailer raised its prices more than any other major UK supermarket last year, causing shoppers to switch to other grocers to look for better deals and cheaper prices.

The repercussions of this meant that the retailer’s credit rating was downgraded by credit rating agency Moody’s, owing to Morrisons’ ability to repay its £7.5 billion of debts.

The agency noted that the supermarket had been hit by a fall in sales alongside increased costs, citing an “aggressive financial strategy, high leverage” and private equity ownership, with concerns about  “operating underperformance” amid rising energy costs.



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