Asda has reported its first quarterly sales growth in two years, signalling a turnaround under executive chairman Allan Leighton. The supermarket chain said like-for-like sales rose 2.7% in the three months to the end of June, compared with the same period last year.
Turnaround under new leadership
Leighton, who took over as executive chairman in November, has been leading a recovery plan focused on improving availability, cutting prices, and simplifying store operations. The company said the return to growth was driven by improved performance in its food business and a stronger response from customers to its value range.
The grocer had been losing market share to discounters Aldi and Lidl, and to premium rivals such as Marks & Spencer and Waitrose. Its sales had fallen for eight consecutive quarters before the latest upturn.
Investment in price and availability
Asda has invested heavily in lowering prices on thousands of products and has reduced the number of out-of-stock items. The company said it had also improved its online delivery service and expanded its rapid delivery offer through partnerships with Uber Eats and Just Eat.
The chain, which is owned by the Issa brothers and TDR Capital, has been under pressure from high debts and competition. In May, Mohsin Issa stepped down as chief executive, leaving Leighton to take a more hands-on role in day-to-day management.
Outlook
Leighton said the results showed "early signs of progress" but acknowledged there was "more to do". He said the company would continue to focus on "winning in food" and improving the customer experience.
The return to growth comes as the wider grocery market remains highly competitive, with inflation easing but consumers still seeking value. Asda said it remained confident of making further progress in the second half of the year.
