Morrisons Private Equity Debt Rises To £7.5bn

Morrisons’ ultimate parent company has reported net debt of £7.52bn, up from £7.07bn a year earlier, as lease liabilities and preference-share obligations increased despite the supermarket’s progress in reducing other forms of borrowing.

Morrisons’ private equity debt burden has risen to £7.52bn at Market Topco, the ultimate parent company of Wm Morrison Supermarkets, according to figures from its latest accounts.

The total was up by £450m from £7.07bn a year earlier, an increase of about 6.4%. Market Topco filed group accounts covering the year to 26 October 2025 with Companies House on 12 August 2026.

The figure requires an important distinction. The £7.52bn measure is broader than the net debt figure Morrisons has highlighted in its own trading updates because it includes liabilities such as leases and preference shares.

Morrisons said in January that its net debt had fallen 46% from its 2022 peak and that gross debt had been reduced by 10% during the latest financial year.

Lease Liabilities Push Wider Debt Higher

Lease obligations at Market Topco increased to £1.97bn from £1.75bn, with the rise linked partly to investment in Morrisons’ vehicle fleet and the addition of 39 stores in the Channel Islands. The company also carried out a smaller sale-and-leaseback transaction during the year.

Morrisons generated £23m from sale-and-leaseback deals while retaining freehold ownership of more than 80% of its supermarket estate.

Preference-share liabilities also increased to about £2bn from £1.79bn. These obligations differ from conventional bank debt and help explain why the broader parent-company liability figure can rise at the same time that Morrisons reports progress in deleveraging elsewhere.

The balance-sheet pressure follows the 2021 takeover of Morrisons by US private equity firm Clayton, Dubilier & Rice. Reuters has estimated Morrisons’ net leverage at around six times EBITDA, highlighting the financial constraints surrounding the retailer almost five years after the buyout.

Balance-sheet restructuring is also affecting other major UK retailers. Rival Sainsbury’s recently agreed a Sainsbury’s Argos sale worth at least £120m, a transaction it expects will reduce its lease-adjusted net debt by about £250m once completed.

Morrisons Sales Continue to Grow

The higher wider debt figure comes despite continued growth in Morrisons’ underlying trading performance.

For the 52 weeks to 26 October 2025, group like-for-like sales increased by 2.8%, while total revenue rose 3.2% to £15.8bn. Underlying EBITDA was maintained at £835m despite inflation, higher costs following the 2024 Budget and disruption from a cyber incident.

More recent figures show sales growth continuing into the current financial year. Morrisons reported a 2.2% increase in like-for-like sales for the 13 weeks to 26 April 2026, its 14th consecutive quarter of like-for-like growth. Total quarterly sales rose 1.7% to £4bn, while first-half underlying EBITDA increased 5.7% to £323m.

The supermarket has also continued cutting costs. Its savings programme had delivered £942m by the end of the second quarter, putting Morrisons close to its £1bn target.

Competition remains intense. Reuters reported in July that Morrisons’ share of the UK grocery market had fallen from more than 10% around the time of the takeover to roughly 8%, as Aldi and Lidl expanded.

The latest accounts therefore present two different sides of Morrisons’ finances. The supermarket has reduced the debt measure highlighted in its trading updates and continues to grow sales, but the wider liabilities sitting at its ultimate parent company increased during the latest financial year as lease and preference-share obligations climbed.