UK Supermarket Giant Lists Dozens of Pharmacies for Sale

A significant UK supermarket is reportedly planning to divest a number of its pharmacies as part of cost-cutting measures. Morrisons, which currently operates around 120 in-store pharmacies nationwide, is said to be evaluating the sale of “dozens” of these locations. This move follows a review indicating that many pharmacies may not be financially sustainable.

Morrisons’ Strategic Shift

Morrisons was acquired in 2021 by private equity firm Clayton, Dubilier & Rice (CD&R). In light of recent financial challenges, the supermarket is leaning toward a store-by-store sale rather than selling its entire pharmacy portfolio. The firm assures that affected pharmacies are unlikely to close and customer service will remain uninterrupted.

Financial Context

• Morrisons reported a pre-tax loss of £381 million for the year ending October 26.
• This loss includes a substantial £281 million interest charge on their significant debt load.
• As of the end of 2024-25, the supermarket’s debt stands at £3.1 billion.
• Despite efforts, Morrisons has only managed a 10% reduction in debts over the year.

This strategic decision to sell pharmacies is part of a broader initiative to streamline operations and manage financial pressures. The decision follows a previous year’s shake-up that resulted in the closure of various services, including 52 cafes, 13 florists, and four pharmacies.

Market Position and Challenges

Morrisons is currently navigating substantial competitive pressures. In 2022, Aldi surpassed it to become the fourth largest grocery retailer in the UK. If challenges persist, Morrisons risks falling behind Lidl as well.

CEO Rami Baitieh characterized the recent closures as a “necessary part” of plans to rejuvenate the brand. The supermarket has indicated that its operational difficulties stem from low consumer confidence, likely influenced by ongoing cost-of-living challenges. To remain competitive, Morrisons strives to match the low prices set by rivals while managing its considerable debt.

Conclusion

Morrisons’ decision to evaluate the sale of its pharmacies highlights a strategic pivot amidst financial setbacks. As the supermarket seeks to enhance its cost structure, the outcome of these efforts will be crucial for its future market standing and overall stability.