The future for both Morrisons and Asda is particularly bleak after both succumbed to debt-fuelled takeovers during the pandemic. Stretching a company’s balance sheet with high-cost debt rarely makes it more competitive despite the claims of private equity cheerleaders but this is a wretched time to be doing it to a supermarket.
Probably wrong too. Or at least wrong in one way.
Specifically high cost debt probably doesn’t do much, no. We might talk about concentrating minds and all that but really, no, that’s a side issue in increasing margins, reducing costs and so on.
The whole process though? Turfing out the incumbent management, taking a knife to the pleasant and settled ways of middle managers? That can work wonders. That move of British Gas into the private sector wiped out what was it, five levels of management?
If that high cost debt is the method by which the other process is achieved then yes, it can indeed work.