Asda has achieved sales growth at established stores for the first time in more than two years, with a 0.2% increase in the seven weeks to 18 August, according to executive chair Allan Leighton. This performance represents a reversal from the preceding three-month period when sales declined 2.3%. Leighton characterized the milestone as psychologically significant for the organization and attributed the improvement to stronger pricing competitiveness, increased customer traffic, and momentum in online operations.
The supermarket chain has faced substantial challenges since its acquisition in 2020 by the Issa brothers and private equity firm TDR Capital for £6.8bn. The transition away from Walmart’s technology systems has proven costly and disruptive, with the company investing approximately £1bn on IT infrastructure revamps. Leighton, who returned to lead the turnaround effort in November 2024 after a 20-year absence, noted that greater stability in these systems has contributed to recent performance gains.
Food sales drove the growth, rising 0.7% during the period, while non-food categories declined amid broader market weakness and timing factors related to back-to-school shopping. The retailer continues to face competitive pressures from discount chains Aldi and Lidl, with Aldi now positioned less than one percentage point behind in market share. Asda is pursuing partnerships, including an arrangement with online specialist Ocado to enhance its digital capabilities starting next year.
Leighton indicated that inflationary pressures appear in specific produce categories due to hot, dry summer weather affecting crop yields. He also commented on broader economic conditions, noting that consumer sentiment remains uncertain as households await clarity on government fiscal policy and the October budget announcement. Leighton called for policies that support rather than inhibit business growth and advocated for retailers to be excluded from additional business rates on larger properties.
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