Morrisons’ net debt has risen to £7.52 billion, highlighting the financial pressure facing the UK supermarket as competition from Aldi, Lidl and the major grocery groups continues to intensify.
Newly filed accounts for Morrisons’ parent company, Market Topco, show that net debt increased from £7.07 billion to £7.52 billion in the year to the end of October 2025.
The figure includes significant lease obligations and preference share liabilities, meaning the £7.52 billion represents a broader financial burden rather than conventional bank borrowing alone.
Lease costs increase
Morrisons’ total lease obligations increased from £1.75 billion to £1.97 billion during the year.
The company said the increase was partly linked to investment in its vehicle fleet and the addition of 39 stores in the Channel Islands. Morrisons also carried out a limited number of sale-and-leaseback transactions involving stores.
Despite those transactions, the supermarket says more than 80% of its supermarket estate remains freehold. It generated £23 million from sale-and-leaseback transactions during the year.
Preference share liabilities also increased, reaching £2 billion, compared with £1.79 billion a year earlier.
The private equity takeover
Morrisons has been owned by US private equity firm Clayton, Dubilier & Rice (CD&R) since its £7 billion takeover in 2021.
The acquisition significantly changed the supermarket’s financial structure. Around £6.6 billion of debt was added to the business as part of the takeover, while the parent’s debt subsequently reached approximately £8.5 billion before falling back.
Before the takeover, Morrisons had net debt obligations of roughly £3.2 billion.
The latest figures therefore illustrate how much the supermarket’s financial position has changed since it left the stock market.
Competition from Aldi and Lidl
The debt increase comes as Morrisons faces one of the most competitive grocery markets in Europe.
Aldi and Lidl have continued to gain ground, putting pressure on the traditional supermarket groups to maintain low prices while investing heavily in stores, technology, online operations and customer loyalty.
Morrisons has also had to respond to changing shopping habits and the growth of discount retail.
The challenge is particularly significant because supermarkets cannot simply pass every additional cost on to customers. Shoppers are increasingly willing to compare prices and move between retailers in search of better value.
Revenue rises but profits remain under pressure
Morrisons’ revenue increased to around £15.77 billion, while underlying EBITDA remained broadly flat at approximately £835 million.
However, the company’s reported loss before tax reached £629 million, largely reflecting non-cash impairment charges associated with its McColl’s business.
The figures demonstrate the difference between the size of Morrisons’ retail operation and the financial burden sitting above it.
The supermarket remains a major UK grocery business, but its owners must balance investment in the retailer with the cost of servicing a substantial financial structure.
A difficult position
Morrisons is caught between two pressures.
On one side, consumers expect supermarkets to offer lower prices and better value. On the other, retailers need to invest in stores, distribution, technology and staff while dealing with property and financing costs.
Aldi and Lidl have made that challenge even more difficult by establishing themselves as mainstream competitors rather than niche discounters.
Morrisons therefore faces a particularly important period.
The supermarket has a substantial customer base and a large physical estate, but £7.52 billion of net debt is a significant financial weight in a market where price competition remains relentless.
The key question for the business is whether future investment and operational improvements can generate enough growth to strengthen the supermarket while carrying that debt burden.