Asda’s return to growth for the first time in two years is “psychologically important” for the business, executive chairman Allan Leighton has said.
The supermarket’s like-for-like sales grew by 0.2% excluding fuel during the first seven weeks to 18 August, the supermarket revealed in a Q2 and Q3 update today. Food sales were up 0.7%, with overall revenue growing by 2.1%.
It is the first time Asda has posted sales growth since since Q1 2024, marking an end to more than two years of consecutive sales decline, during which time its market share has slipped from 13.8% to 11.5%.
“I’ve always said this is a three to five-year turnaround – we’re about a third of the way through it,” Leighton said.
“It’s an important milestone for the business. Psychologically for the business to return to growth, that shows progress. All we’re interested in at this moment in time is: Are we progressing?”
While the progress was “encouraging”, Asda remained in the “foothills” of its turnaround plan, Leighton conceded. “We’ve still got a lot to do,” he said.
“What counts is the day-to-day execution of the basics. Availability. ‘Is your pricing right? What are your promos like? What are your colleagues like?’, on a store by store basis. The more consistent we are on that, the better we become.”
Asda still needs to fix ‘the basics’
Asda had invested in improving 129 of its stores over the past 18 months. There was “another wave of that to come” over the next 18 months, Leighton said.
It had included improvements to Asda’s fresh and frozen sections as part of its Take A Fresh Look campaign, which had seen the reintroduction of greengrocer colleagues to stores. Asda had also reduced the time it takes for fresh produce to get from depots to stores, improving quality, Leighton said.
“There’s no doubt that we have underperformed on online relative to everybody else,” Leighton said. “That’s beginning to improve.”
The recently announced partnership with Ocado, which comes online in 2027, would be a “step-change” for Asda’s online performance, Leighton said.
Asda announced the positive Q3 performance alongside its full Q2 results, for April, May and June. Like-for-like sales fell 2.3% during the quarter, with food sales down 1.9%. Revenue grew 0.4% overall to £6.5bn.
“The gap to the market is reducing. Look at our market share and that is stable, availability is good and price is strong. There are more customers now coming to Asda,” Leighton said.
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