Asda has seen losses swell to almost £1 billion as it undergoes a major turnaround. The UK's third largest supermarket chain is aggressively cutting prices to try to restore its fortunes with shoppers. However, the company came under pressure from a botched IT upgrade last year which hit product availability and dented sales.
Financial Performance
Fresh financial accounts showed that the private equity-backed retailer sank to a £989 million pre-tax loss for 2025, sliding from a £599 million loss a year earlier. The wider loss was linked to a £656 million one-off cost related to the group's IT separation from former parent firm Walmart, which still owns a minority stake. It added that investment into pricing also dragged on profitability, as well as impairment linked to its property portfolio.
Sales and Earnings
Asda also reported that like-for-like sales slipped 3.1% lower year-on-year, excluding fuel. Adjusted earnings were down 33% to £761 million for the year, partly due to the Asda Price and Rollback price investment. Boss Allan Leighton had previously warned that his plan to make Asda between 5% and 10% cheaper than rival supermarkets was likely to “materially reduce” its profits.
Company Statement
A spokesman for the supermarket said: “The reported loss does not reflect the underlying financial strength of the business – and continued powerful cash generation. Asda is supported by a strong balance sheet and capital structure, with £1.3bn in cash, £2.1 billion of total liquidity at the year end, and the majority of borrowings secured well into the next decade. This gives us the flexibility to continue investing in our long-term growth strategy and deliver a disciplined and sustainable turnaround.”
