Asda returns to growth after more than two years
Chair Allan Leighton says lower prices and an improved online service are attracting more shoppers Asda has heralded its first quarterly growth in more than two years as the supermarket’s boss said it was attracting more shoppers with lower prices and an improved online service. Allan Leighton, the executive chair of the UK’s third-largest grocer, said a 0.2% rise in sales at established stores,…
Asda, the UK's third-largest supermarket, reported its first quarterly growth in over two years, marking a significant milestone for the company. Executive chair Allan Leighton attributed the positive trend to lower prices, an improved online service, and greater stability in the company's IT systems following a recent overhaul.
Despite inflation and intense competition from budget chains Aldi and Lidl, as well as larger rivals Tesco and Sainsbury's, Asda's sales rose by 0.2% at established stores, excluding fuel, in the three months ending June. Leighton expressed optimism about the company's future, stating that the business could be "revamped" and that growth was being driven by food sales, up 0.7% in the quarter.
However, challenges remain, particularly in the clothing and general merchandise categories, which saw a decline in sales due to broader market difficulties. Asda's performance has been hampered by the lingering effects of a technology shift from its previous owner, Walmart, and a substantial debt load accumulated since its £6.8 billion acquisition by Issa brothers and private equity firm TDR Capital in 2020.
Despite these hurdles, Leighton remains confident in the company's ability to overcome obstacles and emphasized the importance of government policies that foster growth rather than hinder it.
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