Asda ends two-year slump returns to growth
Asda returns to sales growth after more than two years, reporting a 0.2% rise in like‑for‑like sales for the seven weeks ending 18 August.
Quarterly figures point to a tentative turnaround
The British retailer’s latest data show an improvement from a 2.3% decline in the prior quarter. Revenue that includes fuel climbed 0.4% to £6.5 billion, while the same period without fuel was up 0.2%.
Allan Leighton, the executive chairman who resumed his role in 2024, called the uptick a “major milestone.” He added that the company is still “in the foothills of recovery,” hinting that the lift is just the beginning.
Pricing, stock and digital moves cited as drivers
Asda attributes the modest rebound to sharper pricing, better product availability and an overall smoother shopping experience. The firm also noted that over half of its turnover now comes from non‑grocery operations such as clothing, fuel, pharmacy and optical services.
In May, the supermarket entered a partnership with technology firm Ocado to revamp its online platform. A pilot is slated for the end of the year, with a broader rollout planned for 2027.
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The retailer’s market share slipped to 11.5%, down 40 basis points year‑on‑year, according to industry data released earlier this month.
While the numbers are encouraging, the path ahead is uncertain. Debt levels remain high; net borrowings were £3.2 billion at the close of the second quarter. The balance stems from the 2021 leveraged buyout by the Issa brothers and private‑equity firm TDR Capital, which still holds the majority stake.
Leighton also warned that the new Labour government’s fiscal stance could dampen expansion. He singled out higher employer taxes and packaging levies as cost pressures that “inhibited growth.” The chairman expressed optimism about the incoming finance minister, describing him as sensible and likely to be a competent chancellor.
Outside of policy, weather‑related factors loom. England’s ongoing drought could push food prices higher, especially for fresh produce, Leighton said. He noted that Asda’s price inflation had been “behind the rest of the market,” a subtle advantage in a volatile environment.
Looking ahead, the retailer will need to sustain the incremental gains while managing its debt load. The upcoming pilot with Ocado could be a test of whether digital enhancements translate into measurable sales lifts.
