Yorkshire supermarket giant Morrisons has credit rating downgraded amid debt concerns

Morrisons has had its credit rating cut after recording weaker sales and profits. Credit rating agency Moody’s downgraded the UK’s fifth largest supermarket chain as it cautioned that its ability to repay its roughly £7.5 billion of debts had moved to “negative” from stable.

By Henry Saker-Clark

Published 15th Feb 2023, 14:07 BST

It reduced the firm’s existing overall credit rating one rung from B1 to B2, indicating greater risk for investors and bondholders.

The downgrade comes after a turbulent period for Bradford-based Morrisons following its £7 billion takeover by US private equity firm Clayton Dubilier & Rice in 2021.

Last month, the retail group also revealed a fall in annual earnings amid pressure from depressed consumer confidence and rising costs.

A view of a store sign at a branch of Morrisons supermarket in Camden, London.

Sales have also come under pressure in recent months, resulting in rival Aldi overtaking it as the UK’s fourth-largest supermarket chain.

Moody’s analysts said its concerns over Morrisons were linked to its private equity ownership and a “high leverage” and “aggressive financial strategy”.

Morrisons declined to comment on the report.

Morrisons Yorkshire Bradford Aldi