Asda has reported its first sales growth in more than two years, with boss Allan Leighton crediting lower prices and an improved online service for attracting more shoppers.
The supermarket has struggled since its buyout, recording falling sales and profits while carrying a heavy debt burden and spending almost £1bn on an overhaul of its IT systems. Leighton returned to lead the retailer for a second time in November 2024, after a 20-year absence, to spearhead its turnaround.
Asda’s performance has been hit by technology problems that disrupted stock availability, while it has faced growing pressure from discounters Aldi and Lidl, alongside larger rivals Tesco and Sainsbury’s. Aldi is now less than one percentage point behind Asda in market share and continues to grow faster, putting its position as the UK’s third-largest supermarket under increasing pressure.
Allan Leighton, Asda’s Executive Chairman, said: "Returning to growth in the current quarter for the first time in more than two years is a major milestone for Asda. It reflects 18 months of hard work to strengthen our proposition, improving price, availability and the overall shopping experience.
"We saw momentum build in Q2 with stable market share, and we're now seeing that translate into more customers choosing Asda. While this progress is encouraging, we are still in the foothills of recovery. There's still more work to do as we focus on building a stronger business for the long term.”
Michael Gleeson, Asda’s Chief Financial Officer, said: “A challenging geopolitical and economic backdrop continued to weigh on consumer confidence and household budgets during Q2.
"Despite these pressures, our continued investment in price and the overall customer proposition means we continue to make steady progress in our turnaround journey.
"Disciplined cash management together with a robust capital structure gives us a solid foundation to continue delivering our Formula for Growth plan in the second half of the year."
Looking ahead
Asda continues to invest in the customer offer and the capabilities needed to support long-term growth. The Ocado partnership remains on track, with a pilot launching towards the end of the year, ahead of a wider rollout in 2027.
The business has also become the first retailer outside the US to partner with Amazon Ad Services.
Rolling out from Q4 onwards, this partnership will create a new revenue stream and deliver a more personalised online shopping experience for customers.
Pilots of shelf-edge availability cameras are underway, with plans for a wider rollout in the coming months. This technology will help stores spot gaps faster, allowing colleagues to improve availability and ensure shelves remain fully stocked with products.
More than a supermarket
Nearly half of Asda’s revenue comes from businesses outside traditional grocery, including George, fuel, convenience, pharmacy, optical and online.
Asda is expanding its presence in local communities through Asda Convenience.
A three-store pilot in Glasgow, launched with independent retailer One-O-One earlier this month, is the first step towards building a scalable wholesale model that combines Asda's value, range and supply chain expertise with local retail knowledge.