UK supermarket group Morrisons said underlying earnings were unchanged in its 2024/25 financial year, citing a jump in costs even as revenue increased. The grocer reported underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of £835 million for the year ended October 26, matching the prior year on its preferred measure. Revenue rose 3.2% to £15.8 billion, the company said.
Morrisons attributed the flat earnings performance to a £200 million increase in costs, which it linked to measures in the UK government’s 2024 budget, the impact of a cyber incident in the first quarter, and inflation that proved higher than expected. The company is owned by the U.S. private equity firm Clayton, Dubilier & Rice and is the UK’s fifth-largest grocer.
On a statutory basis, Morrisons remained loss-making. It posted a pretax loss of £381 million, compared with a loss of £414 million in 2023/24. The company said the result reflected depreciation and amortisation charges and interest costs totalling £281 million.
Christmas Trading Gains Momentum After a Softer Quarter-End
Morrisons said trading strengthened during the key festive period, following slower growth at the end of its fiscal year. Like-for-like sales growth in the fourth quarter to October 26 eased to 2.4%, down from 3.0% in the third quarter. However, performance improved in the crucial Christmas run-in: like-for-like sales rose 3.4% in the six weeks to January 4, the company said.
The company pointed to strong demand for its premium own-label line, “The Best,” where sales increased 17.4% over the same festive period. Chief executive Rami Baitiéh said the Christmas outcome provided a platform for the start of the new year, describing it as “a good Christmas in 2025” and a “solid foundation” for the first quarter.
Baitiéh has been chief executive since 2023, and has set out plans to update the retailer’s offer and operations as it competes with larger traditional grocers and fast-growing discounters in a highly price-sensitive market.
Balance Sheet Progress and a Differentiated Supply Model
Alongside the trading update, Morrisons highlighted progress on leverage. It ended the year with debt of £3.17 billion, down 46% from its 2022 peak, according to the company. The reduction comes as highly leveraged UK retailers face scrutiny over financing costs and refinancing risks in a higher-rate environment.
Morrisons also continues to stand out for its vertically integrated production footprint. The company said it differs from major rivals because it operates its own production capabilities, making about half of the fresh food it sells. Management has presented this model as both a way to support quality and availability and a lever for efficiency, though it can also carry fixed costs that become more visible during periods of margin pressure.
The company said the year’s results were influenced by cost headwinds linked to fiscal policy, operational disruption related to the cyber incident, and inflation dynamics that exceeded expectations—factors it argued offset the benefit of higher sales.
Market Position and Competitive Backdrop
Despite the improvement over Christmas, Morrisons is still lagging several major competitors, according to external industry data referenced by Reuters. The data showed Morrisons continuing to underperform both traditional peers Tesco and Sainsbury’s, as well as discount chains Aldi and Lidl.
The competitive context has been defined by aggressive promotions, a sustained focus on value ranges, and continued consumer sensitivity to food prices. Tesco and Sainsbury’s have also reported strong Christmas trading updates, underscoring the intensity of competition for market share during the most important season for UK grocers.
For Morrisons, the latest update suggests momentum improved late in the period, with premium-range growth providing an additional boost. Investors and industry watchers will likely focus on whether the better festive performance can be maintained through the post-holiday months, when demand patterns typically normalize, and retailers face renewed pressure to protect margins while keeping prices competitive.
