Asda ‘edging forward’ with turnaround despite plummeting profits

For the year ending December 31, 2025, Asda reported a 33.1% drop in adjusted EBITDA to £764m, and a 0.3% dip in like-for-like sales excluding fuel and a 3.3% fall in total sales to £21bn.

Despite this, Asda said it had made “clear progress” in the first year of its turnaround plan and had opened a 4% to 7% price gap over the competition.

In the period, it completed its Project Future IT decoupling from its former parent company Walmart, restored availability to an “eight-year high” of 95%, and had strengthened liquidity, ending the period with £1.3bn in cash.

In the period, 47% of Asda’s total revenues came from George, its Express convenience business, pharmacy, optical, online, and fuel.

Asda executive chair Allan Leighton said: “As we enter the second year of our turnaround, we have an improved customer offer, stable core systems, a strengthened balance sheet, and a strong leadership team to deliver our Formula for Growth. Our progress in key areas like price, availability, and customer satisfaction is edging forward, reflected in positive like-for-like sales growth in our stores for the last two months.

“At the same time, Asda is far more than just a supermarket, with almost half of our total revenues last year coming from the wider group, which includes George, Express, pharmacy, optical, online, and fuel. George and pharmacy outperformed their respective markets last year, demonstrating the breadth of our offer.

“I want to thank all our colleagues for their hard work and commitment. Their determination to make Asda better every day is what drives our progress.”

‘It’s beginning to impact now’

When asked why opening a price gap on its competitors hasn’t yet begun to feed through to progress for Asda in either market share data, or on the balance sheet, Leighton insisted the work he and his team have done in the first year of the turnaround is beginning to bear fruit. 

“We opened up that price gap over the year, and we’re now beginning to see an uptick in sales,” he said. ”So, it’s beginning to impact now. We’ve still got somewhere to go. I said we’re in the 4% to 7% range. We need to be in the 5% to 10% range. We’ll continue to do that, that’s part of the anchoring of Asda. 

“We have to have that price gap. And we have to have high availability. Because we’re a weekly shop. That brings the traffic. And then we have to trade that traffic into our other areas of the business. That’s our point of difference”.

When asked if he was worried about the impact of the war in the Middle East on the second year of his turnaround, Leighton said: “It’s difficult to tell what the impact will be at the moment, because everything is so spiky and it changes, hour by hour.

”Whatever happens, I don’t see anything as holding back the recovery of the business,” he said. “I’d just need to remind everyone that it’ll take three-to-five years. And it does. I’m happy, though. We’ve gained some momentum and we’re edging forward. You don’t suddenly make giant leaps. Day-by-day, we’re getting better”.