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Morrisons increased prices by almost a fifth last year – more than any other major grocer and doubled the increase at Sainsbury’s
- Shopping basket at chain costs £75 this month, 18% more than last year
- Morrisons was sold to US private equity barons two years ago
- Findings justify critics who warned that sales would lead to higher prices
Morrisons increased prices by almost a fifth last year – more than any other major grocer and doubled the increase at Sainsbury’s.
A shopping basket in the supermarket in Bradford cost £75 this month, up 18 per cent from a year earlier, according to The Grocer magazine.
The findings justify critics of Morrisons’ sale – two years ago to US private equity barons – who warned it would lead to higher prices.
The same basket of 33 everyday products cost £70 at Sainsbury’s, up 9 per cent from a year earlier. Tesco’s basket cost £74, up 13 percent, while Asda was the cheapest at £67.15, up 11 percent.
One of Morrisons’ price hikes was New Covent Garden’s tubs of leek and potato soup, which are now more than twice as expensive as a year ago, at £2.20 for 560g. It also increased the price of 750 gram boxes 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 shopping basket at Morrisons cost £75 this month, up 18 per cent from a year earlier
The average overall price increase in the industry for a shopping cart is 13.2 percent. It’s the latest sign that Morrisons has been raising prices faster than its rivals since falling into private equity hands in 2021.
The chain was bought by US private equity firm Clayton, Dubilier & Rice (CD&R) in a debt-driven deal led by former Tesco chief Sir Terry Leahy. Analysts say the massive borrowings at a time of rising interest rates have left the company less room to keep prices low.
As a result, shoppers are bleeding to Tesco, Sainsbury’s and Asda. Morrisons has lost some of its market share to Aldi and Lidl, with the former taking their place in the ‘Big Four’ of UK grocers last year.
Credit bureau Moody’s downgraded Morrisons’ rating last week. Accounting professor and Labor colleague Lord Sikka said the grocer is suffering from ‘the curse of private equity’. He said CD&R financiers have followed “the usual model” of loading a company with debt and trying to maximize short-term profits.
Sikka also pointed to “sale and leaseback” activity, a factor that contributed to Debenhams’ demise in 2020. He asked: “Will history repeat itself and will Morrisons go the same way as Debenhams, Maplin, Toys R Us and others? ‘
Morrisons said it has improved on price this year compared to rivals, lowering the cost of many products.