Allan Leighton claimed Asda is “broadly where we expected to be” in its turnaround efforts, after its performance improved during the first quarter of the year.
Asda’s like-for-like sales still fell by 0.8% during the period to 31 March, however this was much slower than the –4.2% in Q4, and –1.3% when adjusted to account for Easter. Total revenues were down 1.5% as a result, at £5bn excluding fuel.
Better availability, which was maintained at an “eight-year high” 95%, as well as “strong operational inputs” had led to the improved performance at its supermarkets, following the disruption caused by the bungled final stage of its Project Future IT upgrade in August, Asda said.
Its convenience business Asda Express also continued to “outperform the wider convenience market” and had delivered seven consecutive quarters of growth.
“In our previous trading update, I described performance as edging forwards and this continued through Q1, finishing the quarter broadly where we expected to be,” Asda chairman Leighton said in an update today.
“This progress is due to the stabilisation of our core systems, which has enabled us to deliver ongoing improvements in availability, price and customer satisfaction,” Leighton said.
Despite significant investments into regaining its price position over its big four rivals, Asda’s market share slipped further last month, falling to 11.5% after sales dropped 3.0% according to Worldpanel.
In a bid to convince the thousands of shoppers who have left its stores over recent years to ‘Take a Fresh Look’ at its offer, Asda launched a major customer experience drive last week.
It included a major range refresh, as well as significant investment into experiential retail and loyalty. “We’re confident they’ll see the difference straight away when they do,” Leighton said.
Asda-Ocado tie-up a ‘statement of intent’
In another significant “statement of intent”, Asda announced a new multi-year partnership with Ocado to overhaul its online shopping business. Ocado will replace and upgrade Asda’s existing e-commerce infrastructure, with the new proposition going live across all Asda DCs in early 2027.
“It will bring the best-in-class technology and, importantly, enable us to compete more strongly in this fast-growing channel,” Leighton said. “This is a clear statement of intent and will put us in a much stronger position for the future.”
Summarising the results overall, Asda’s chief financial officer Michael Gleeson said: “We traded the first quarter in line with expectations and significantly improved vs Q4, supported by continued operational stability across our core systems, giving us the platform to operate more consistently and effectively.
“This was underpinned by continued disciplined cash management and a strong capital structure, with all debt maturities addressed through to 2028. Looking ahead, we expect to run the business with greater consistency and build on the progress made in Q1 as we deliver our Formula for Growth.”
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