Morrisons hiked prices by virtually a fifth previously 12 months – greater than some other main grocer and double the rise at Sainsbury’s
- Shopping basket at chain prices £75 this month, 18% enhance from 12 months earlier
- Morrisons bought to US non-public fairness barons two years in the past
- Findings vindicate critics who warned sale would result in increased prices
Morrisons hiked prices by virtually a fifth previously 12 months – greater than some other main grocer and double the rise at Sainsbury’s.
A procuring basket on the Bradford-based supermarket value £75 this month, an 18 per cent enhance from a 12 months earlier, in line with The Grocer journal.
The findings vindicate critics of Morrisons’ sale – to US non-public fairness barons two years in the past – who warned it could result in increased prices.
The similar basket of 33 on a regular basis merchandise value £70 at Sainsbury’s, having elevated 9 per cent from a 12 months earlier. Tesco’s basket value £74, a 13 per cent enhance, whereas Asda was the most affordable at £67.15, up 11 per cent.
Among Morrisons’ value hikes have been on tubs of New Covent Garden leek and potato soup, which are actually greater than twice as pricey as a 12 months in the past, at £2.20 for 560g. It additionally raised the value of 750g containers of Jordans granola by 80 per cent to £3.59, and Filippo Berrio olive oil by 50 per cent to £5.99.
Price hike: A procuring basket at Morrisons value £75 this month, an 18 per cent enhance from a 12 months earlier
The trade common total value rise for a basket of procuring is 13.2 per cent. It is the most recent signal Morrisons has been jacking up prices faster than rivals since falling into non-public fairness palms in 2021.
The chain was purchased by US non-public fairness agency Clayton, Dubilier & Rice (CD&R) in a debt-fuelled deal spearheaded by former Tesco chief Sir Terry Leahy. Analysts say its enormous borrowings at a time of rising rates of interest have left it with much less scope to maintain prices low.
As a outcome it has haemorr-haged customers to Tesco, Sainsbury’s and Asda. Morrisons has misplaced a piece of its market share to Aldi and Lidl, with the previous stealing its spot within the ‘Big Four’ of British grocers final 12 months.
Credit company Moody’s downgraded Morrisons’ score final week. Accounting professor and Labour peer Lord Sikka mentioned the grocery store is affected by ‘the curse of personal fairness’. He mentioned CD&R financiers have adopted ‘the same old mannequin’ of loading an organization up with debt and attempting to maximise short-term earnings.
Sikka additionally pointed to ‘sale and leaseback’ exercise, an element that contributed to the demise of Debenhams in 2020. He requested: ‘Will historical past repeat itself, and can Morrisons go the identical approach as Debenhams, Maplin, Toys R Us and others?’
Morrisons mentioned it has improved this 12 months on value in contrast with rivals, reducing the price of many merchandise.