Morrisons considers US$1.36B property financing deal
The company also expands free breakfast offerings for families during school holidays
UK – Morrisons is assessing ways to secure up to US$1.36 billion using part of its freehold store portfolio as collateral, according to Sky News, citing sources.
The supermarket has enlisted real estate advisory firm CBRE to review potential financing structures for the proposed transaction.
The initiative is part of Morrisons’ effort to address flat annual earnings amid rising operating costs since its acquisition by the U.S. private equity firm Clayton Dubilier & Rice in 2021.
Chief Executive Rami Baitiéh has been implementing changes across the chain, which produces roughly half of the fresh food it sells, setting it apart from competitors such as Tesco, Sainsbury’s, Aldi, and Lidl.
Sky News reported that the financing plan is in its initial stages and is not expected to take the form of a standard sale-and-leaseback arrangement.
One option under consideration is a medium- or long-term loan secured against several of the company’s supermarkets, rather than selling properties outright.
Morrisons and CBRE have not responded to requests from Reuters for comment on the potential deal.
In a separate initiative, Morrisons is expanding its free breakfast program for families during school holidays in England, Scotland, and Wales through its partnership with Kellogg’s.
The offer, available in all Morrisons cafés, provides a free breakfast to both children and adults every day during official school breaks.
Families participating in the program receive a bowl of Kellogg’s Corn Flakes or Rice Krispies, a choice of dairy or plant-based milk, and a complimentary apple or banana.
The supermarket’s expansion of the initiative comes as research indicates that one in three parents struggles to feed their children during school holidays due to rising food costs and the closure of breakfast clubs.
Matt Khan, Senior Trader for Morrisons Café, noted that school holidays increase pressure on families due to higher food expenses and disrupted daily routines, prompting the extension of the free breakfast offer.
By offering Kellogg’s breakfast nationwide, Morrisons aims to make it easier for families to maintain balanced meals during the holidays.
The property financing and free breakfast programs reflect simultaneous strategic and community-focused efforts by Morrisons to manage financial pressures while supporting households.
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