Asda is selling 24 stores and a distribution centre in a £568m sale-and-leaseback deal, raising concerns about the supermarket's financial health as sales continue to decline. The Leeds-based grocer, which has been losing market share despite price cuts, will lease back the properties from buyers DTZ Investors and Blue Owl Capital.
Sales fell 3.9% in the three months to 2 November, with market share dropping one percentage point year-on-year, according to Worldpanel by Numerator. Asda's parent group reported a near-£600m loss last year, weighed down by falling sales and high debt servicing costs.
Critics view the deal as a sign of weakness. Nadine Houghton of the GMB union said: 'Asda's owners, TDR Capital, is selling off yet more assets to settle the debt liabilities heaped on the business by its own borrowing.' Shore Capital analyst Clive Black added: 'From the outside it looks like a sign of weakness that tangible fixed assets are being sold at this time.'
The proceeds will be used to repay a debt to Walmart, which retains a 10% stake, rather than for investment or cutting main debts, according to reports. Asda previously sold warehouses for £1.7bn in 2021 and 25 supermarkets for £650m in 2023 in similar deals.
Asda, which operates 579 supermarkets, 517 Express stores, and 29 Asda Living outlets, said it will retain operational control of the sold sites. A spokesperson stated: 'Asda's property strategy is centred on maintaining a strong freehold base while also taking a considered and selective approach to unlocking value from our estate.'
