Asda sales growth slowed ahead of leadership shake-up

Asda's food sales growth slowed significantly in the weeks leading up to the leadership change, with the company's like-for-like food sales increasing by a mere 0.1 percent in the third quarter. This marked a notable slowdown from the earlier sharp increase in sales observed at the beginning of this period. Earlier reports indicated a 0.7 percent like-for-like sales growth in food over the preceding seven weeks, but the recent figures covering the full 13 weeks to the end of September reveal that this momentum has now diminished.

Allan Leighton, who was instrumental in leading Asda's turnaround, stepped back from his executive role in November 2024 to be replaced by David Potts, a former Morrisons and Tesco executive. Potts assumed the position of CEO on Tuesday, while Leighton took on a non-executive role. Leighton had previously stated in August that the company was in the "early stages of recovery" after achieving its first like-for-like sales growth in over two years.

Asda's overall revenue, which includes fuel sales, grew by 3.1 percent year-on-year in the 13 weeks leading up to September. This growth was primarily driven by the increase in online sales, which rose by 6.9 percent like-for-like. The discount supermarket emphasized its efforts to maintain low prices to attract customers who are struggling with budget constraints. British families' budgets remain at a six-month low, according to Asda's income tracker.

Michael Gleeson, Asda's finance chief, attributed the company's third-quarter performance to the work done in implementing its strategy. He highlighted Asda's key strength, which is its diverse range of businesses, including food, clothing, fuel, pharmacy, and other services. This broad business portfolio allows them to cater to a wider range of customer needs and opens up more growth opportunities.

Gleeson also stressed the importance of Asda's disciplined approach to managing costs and cash, which enables them to continue investing in value today and long-term sustainable growth.

Since Leighton's appointment as executive chairman, David Potts has focused on enhancing the in-store experience for shoppers. Potts instructed Asda's general managers to make more staff-operated checkouts available in its stores. He emphasized the need to improve the shopping experience by making it easier for customers to navigate the store and complete their purchases.

On Thursday, Potts announced a price reduction of 4p per litre for petrol and unleaded diesel at Asda's 321 fuel forecourts, which will save the average family £2.20 per tank.