Morrisons debt pile swells to £7.5bn - what's happening at the troubled supermarket?

See more This is Money on Google - save us as a Preferred Source Updated: 06:55 EDT, 13 August 2026 Morrisons' debt pile reached £7.52billion last year as it attempts a major overhaul to strengthen its bottom line and appeal to more shoppers. Earlier this year, Lidl ousted Morrisons as Britain's fifth-largest supermarket chain, showing just how far the once widely-loved retailer has fallen. It has adopted an aggressive cost-cutting drive, targeting £1billion in savings and competing with discounters after the private equity takeover by Clayton, Dubilier and Rice loaded it with billions of pounds worth of debt. Companies House filings this week showed net debt at Market Topco, the parent company of Morrisons, rose from £7.07billion to £7.52billion in the year to the end of October 2025. A spokesperson for Morrisons said the increase in debt 'primarily reflected investment in the future growth of the business, specifically in our vehicle fleet and the addition of 39 new stores in the Channel Islands'. Morrisons' pre-tax losses from continuing operations before exceptional items widened to £629million, from £612million in the period. Under pressure: Lidl ousted Morrisons to become Britain's fifth largest supermarket The supermarket's total lease obligations increased from £1.75billion to £1.97billion in the year to the end of October, most of which stemmed from investment in its vehicle fleet and 39 stores in the Channel Islands.The rise also included a small sale-and-leaseback deal involving a handful of stores, but Morrisons said more than 80 per cent of its supermarket estate remained freehold.The retailer made £23million in profit from sale-and-leaseback transactions during the year.Morrisons has been owned by US private equity firm Clayton, Dubilier & Rice since its 2021 takeover, which added £6.6billion of debt to the business.It has struggled to keep up with discounters Aldi and Lidl, while grocery behemoths Sainsbury's and Tesco have also managed to increase market share. Lidl now holds an 8.7 per cent share of the grocery market, according to figures from Worldpanel by Numerator for the three months to 14 June - ahead of traditional heavyweight Morrisons, which holds 8.4 per cent.In May, Morrisons announced plans to close 100 loss-making convenience shops, placing hundreds of jobs at risk, as it blamed Labour for rising costs.The supermarket chain said it faced pressures that have been worsened by 'Government policy'.Richard Hunter, head of markets at Interactive Investor, said: 'The debt figure is concerning, but in terms of perspective it was estimated that the takeover of Morrisons by Clayton, Dubilier & Rice in 2021 added £6.6billion of debt to the business. 'This compared with Morrisons’ pre-acquisition level of around £3.2billion, and the latest spike has been explained by the company as having been driven by a mixture of increased staff costs given government policy, investment in the business such as opening new stores in the Channel Islands, a cyber incident in the previous quarter and impairment charges relating to its own acquisition of McColl’s in 2022.'While the odds are clearly stacked against it, Morrisons has pointed out that 80% of its store estate remains freehold, which provides something of a buffer.'He added: 'That being said, the traditional strength and ferocity of competition within the sector shows no signs of abating and Morrisons was recently overtaken by Lidl in the UK market share table. The business has a tough road ahead and increasing profits to reduce the debt pile will be an arduous and time-consuming target, if indeed it can be achieved at all.'DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you