Asda’s sales have grown for the first time in two years, with like-for-like sales increasing by 0.2% excluding fuel during the first seven weeks to 18 August. Executive chairman Allan Leighton described this return to growth as “psychologically important” for the business.
Food sales were up 0.7%, and overall revenue grew by 2.1%. This growth marks an end to more than two years of consecutive sales decline, during which time Asda’s market share slipped from 13.8% to 11.5%.
Leighton said the company is about a third of the way through its three to five-year turnaround plan. “It’s an important milestone for the business,” he said. “Psychologically for the business to return to growth, that shows progress.”
While the progress is “encouraging”, Leighton conceded that Asda remains in the “foothills” of its turnaround plan. They’ve still got a lot to do, he said, emphasizing the importance of day-to-day execution of the basics, such as availability, pricing, and store operations.
Asda has invested in improving 129 of its stores over the past 18 months, with another wave of improvements to come over the next 18 months. The company has also made changes to its fresh and frozen sections as part of its Take A Fresh Look campaign.
Leighton acknowledged that Asda has underperformed on online relative to its competitors. However, he said this is beginning to improve, and the recently announced partnership with Ocado will be a significant improvement for Asda’s online performance when it comes online in 2027.
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Asda announced its positive Q3 performance alongside its full Q2 results, which showed a 2.3% decline in like-for-like sales and a 1.9% decline in food sales. However, revenue grew 0.4% overall to £6.5bn.
Leighton said the gap to the market is reducing, with stable market share, good availability, and strong pricing. He also noted that more customers are now coming to Asda, which is a good sign for the company.
Asda’s focus on executing the basics and improving its online performance is essential for its long-term success. By addressing its weaknesses and building on its strengths, Asda can continue to make progress and regain its market share.
Asda’s sales growth is a positive sign for the company, and its efforts to improve its stores and online performance are expected to continue. With the partnership with Ocado on the horizon, Asda is poised to make significant strides in its online capabilities.
The company’s market share has stabilized.
Availability and pricing are strong. Asda is also seeing an increase in customer traffic.