In a challenging year marked by rising costs and a cyber incident, supermarket chain Morrisons has revealed annual losses of £381 million. However, the UK’s fifth-largest grocery retailer has also reported a resurgent sales performance over the crucial Christmas period, hailing a “good performance in a competitive market.”
The group, owned by US private equity firm Clayton, Dubilier & Rice, faced a £281 million interest bill on its £3.1 billion debt pile, although this was narrowed from losses of £414 million in the previous year. Despite the heavy borrowing costs, Morrisons said it cut debt by 10% over the year.
Rami Baitieh, Morrisons’ chief executive, said the results “demonstrated our resilience in the face of some tough external headwinds, from the cyber incident, rising inflation and Government cost increases, which we worked hard to offset.” The company managed to deliver £233 million in cost savings over the year, with further savings expected to meet its £1 billion target.
The festive period proved a bright spot for the retailer, with like-for-like sales growth picking up to 3.4% in the crucial six weeks to January 4. This was driven by strong demand for Morrisons’ own-brand premium range, which saw sales jump 17.4%. Non-food sales were also up 10%, and the clothing range experienced a 4.7% increase over the Christmas period.
However, the company’s market share slipped over the Christmas season, according to industry data from Worldpanel. Morrisons’ share declined to 8.5% in the 12 weeks to December 28, down from 8.6% a year earlier, as the gap with rival discounter Lidl continues to narrow.
Looking ahead, Baitieh acknowledged that “the grocery market remains competitive” and said the company is committed to its focus on delivering good value and keeping prices low for customers. He added that consumer confidence is “still not at its best” in 2026, with the impact of government cost increases, inflation, and budget uncertainty all weighing on customer sentiment.
Despite the challenges, Morrisons’ chief financial officer, Jo Goff, expressed confidence in the company’s ability to meet its £1 billion savings target by the end of the current financial year, stating, “We expect to exceed our £1 billion savings target by the end of 2025-26.”
