Both Asda and Morrisons shouldered substantial loans post-acquisition by private equity entities, resulting in a collective interest payment of £900 million last year, erasing their profits.
The heightened debt of Morrisons and Asda under private equity leadership significantly affects their competitive edge, opined retail expert Richard Hyman.
Industry analysts say leading players like Tesco and Sainsbury's are in a more favorable position to weather the storm of increased borrowing expenses, courtesy of their shareholder equity, which provides an additional funding avenue.