Asda has slumped £600m into the red as the retailer struggled with a mountain of debt and invested hundreds of millions of pounds in a bid to turn around its fortunes.
The slide from a £180m pre-tax profit to a £599m loss in 2024 came as food sales lagged expectations, falling 3.7% on a like-for-like basis, according to newly filed accounts for parent company Bellis Finco.
Total revenues at Asda increased 4.8% to £26.8bn during the year, but sales slipped slightly by 0.8% to £21.7bn when excluding fuel. Group like-for-like numbers were down 3.4%, compared with 5.4% growth in 2023.
Asda suffered a £378m impairment charge in 2024 related to the retail chain investing in lowering prices as it battles to become more competitive in the market. The move hit the company’s short-term cashflow forecast, resulting in the one-off charge.
Project Future
It also recorded exceptional costs of £310m related to ‘Project Future’ last year as it separated its IT system from former owner Walmart.
Project Future, which is expected to complete this year, has cost the group £889m since the Issa brothers teamed up with TDR Capital to buy Asda for £6.8bn in 2021.
An Asda spokesman told The Grocer: “Asda’s core business remains strong and profitable, delivering a pre-tax profit of £115m before exceptional items.”
He added the impairment charge and exceptional costs were one-offs and did not reflect the underlying performance of the business.
“A more accurate indicator of our ongoing strength is our adjusted EBITDA after rent, which increased to £1.14bn from £1.08bn the previous year.”
Asda also absorbed climbing finance costs to service its debt pile, with charges of £611m in 2024, up from £441m in 2023, following a refinancing last year.
Interest on lease liabilities also rose from £177m to £218m as a result of the sale and leasebacks agreed in 2023.
External borrowings at the group stood at £4.9bn at the year end, with net debt excluding lease and rent liabilities and obligations steady at £3.8bn.
The Companies House accounts called 2024 “an important year for Asda” as it completed the integration of Euro Garages UK and Irish forecourts, as well as Co-op petrol stations, to the Express format.
“The Asda business will be stronger and fit for the future as a result of the transformation progress made in FY24,” the accounts added.
‘Green shoots of recovery’
Last month, Asda executive chairman Allan Leighton, who returned to the business at the end of 2024 after a more than 20-year absence, claimed to have seen “green shoots of recovery” at the group. The comments came despite a 3.1% fall in first-quarter like-for-like sales.
Leighton added the turnaround strategy had seen a price gap start to emerge with its traditional supermarket rivals.
Market share has also continued to erode at the group, dropping 1.7% year on year to just 11.9% in the 12 weeks to 15 June 2025, according to the latest Kantar data this week.
The Companies House accounts said declines in market share had stabilised and the food business was benefitting from recent improvements in availability, customer satisfaction and price position in store.
“We remain confident that the underlying financial strength of the group provides a platform to return to sales growth in food and start to recover market share through 2025,” Asda added. “Our ‘Formula for Growth’, which was launched in Q1 2025, marks the return to a clear, straightforward strategy which plays to Asda’s established strengths and value credentials.”
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