Morrison’s private equity owners have asked hundreds of employees, from store managers to thousands of pounds of their own money, to invest in the company.
More than 800 people have been asked to invest in ailing supermarkets in recent months, with a well-informed source saying middle-level department heads have been asked for £10,000, while department heads have been asked for £10,000. 25,000 each were demanded. It is understood that the minimum investment required to participate was £2,000.
The source said that although the contribution was voluntary, some employees were upset because they felt pressured to contribute cash to an ailing company at a time when the cost of living was rising.
“There’s a habit of asking people to pay a bonus instead of asking them to invest,” the source said.
However, those who agreed to invest in Morrison’s shares are understood to have received a special bonus equivalent to 60% of the amount they were supposed to invest before tax, in which a large number of people had more invested.
A spokesman said: “The opportunity to invest in the future of Morrison has been incredibly popular across the company, with more than 800 employees, or more than 90% of those qualified, making the decision to invest.”
It’s common practice to ask employees to invest in private equity deals, one expert said, as the stakes are seen as an incentive to help the company grow.
While it’s not common to ask ordinary workers to participate, he said the broader-than-usual scope of the Morrison plan could be seen as a good thing, as more people get the potential return on their investment. can benefit
The grocery store, which was bought by US private equity firm Clayton Dubilier & Rice (CD&R) last year in a deal worth nearly £7 billion, lost its place as Britain’s fourth-biggest supermarket chain to German discounter Aldi last week.
Morrison’s market share is falling as it is opening too few new locations and surveys show that its prices have become more expensive than those of its main competitors.
Sales fell 4.1% in the three months to September 4, at a time when all other major supermarkets except Waitrose were increasing sales.
An industry insider said: “The numbers are looking grim. [The product] Doesn’t look exciting and he’s missed a lot of opportunities.” The source said suppliers were disillusioned with the drop in quantities of goods sold by the retailer.
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Trevor Strain, Chief Executive David Potts’ right-hand man, is said to have told the company that he intends to leave the company as he seeks a top job elsewhere. A source said that after Morrison joined in 2009, Strain was not committed to another five years in the business to oversee CD&R’s investment plan.
In April, Morrison warned that its profits were likely to take a significant hit this year as the cost of living crisis and the disruption caused by the war in Ukraine weighed on the grocery market.
The supermarket chain said “developments in the geopolitical environment” and “continued and rising inflationary pressures” have been weighing on consumer sentiment and spending since early February.
The retailer recently bought McCall’s network of more than 1,000 convenience stores out of administration to protect the wholesale supply deal for the chain. McCall suffered from financial pressures for some time before his collapse.